Many potential home buyers stay on the fence a long time, sometimes years, thinking that being cautious and moving slowly will ensure they make a good buying decision, get a better deal, and save money. Unfortunately, the opposite is often true – hesitating to buy a house costs them instead. To help you avoid this mistake, we offer these 5 was hesitating to buy a house in will cost you.
1. Home Prices Still Rising
Home prices are still rising though at a slower rate of increase now. Still, prices are up about 10% year-over-year. This means that if you wait to buy a house in , you’ll pay a higher purchase price. And the longer you wait, the more it will cost you.
Here’s an illustrative example . . .
Suppose a home is currently priced at $325,000. At this price, you’d pay a10% down payment of $32,500 and then finance the remaining $292,500. But with a projected increase in price of 7.7%, if you wait a year to buy, you will pay a purchase price of $350,025. You’re 10% downpayment will then be $35,003, and you will have to borrow $315,022 – increases of $2,503 for the down payment and $22,523 on the mortgage – just for waiting one year.
2. Low Inventory
Also, inventory remains low in almost all markets across the county. And there’s no sign of that trend reversing anytime soon.
So hesitating to buy a house in will likely cost you more for two reasons:
- It will probably take quite some time to find a house that suits your needs. You will, as a result, spend a lot of time, energy, and money on your home search because options are so limited. And while you’re trying to find the right house, prices will be increasing.
- With low inventory, it may be much harder to find a house you want within your price range. So, in order to get what you want, you may wind up paying more.
3. Mortgage Interest RatesGoing Up
Mortgage interest rates were at historic lows just a few months ago. Now, though, they are going up, and industry watchers expect this trend to continue.
If you wait to buy a house in , your mortgage will have a higher interest rate. Even with a small increase in interest rate, you will pay thousands of dollars more for the house over the life of the loan.
If you want to avoid higher interest rates (and home prices), you need to act now. Contact a agent at 866-593-7012 to learn more about the best way to proceed.
4. Lost Equity
Every day you hesitate to buy a house in is a lost opportunity to build equity. Remember what we said about increasing home prices? If you buy now, your house will soon be worth more, but if you wait, that opportunity is lost.
Under the current market conditions with rising prices, continuing to rent while deciding whether to buy a house in will mean that you lose out on an investment. The sooner you buy, the sooner you’ll start building equity and getting a return on your investment.
5. Missed Tax Advantages
In addition, hesitating to buy a house in will cause you to miss out on the definite tax advantages of homeownership.
Tax laws allow you to deduct your mortgage interest, as well as the first $10,000 of property taxes. So waiting to buy may means that you pay more in taxes.
Use an Agent to Buy a House in
It should be pretty obvious, then, that waiting to buy can cost you in several ways, and the costs can be fairly substantial. So why wait?
If you’re ready to buy a house in and avoid the costs of hesitating, contact us today at 866-593-7012.