Tuesday, December 2, 2008

Keep your eye on the right ball...

What are the risks of Waiting to Buy Your First Time Home or Move up Home?...Excess home inventories are expected to level and begin shrinking as New Construction has contracted dramatically. Home prices are stabilizing. The risk in waiting to see if home prices go down any further can dramatically be offset if at the same time Mortgage Rates increase. Say you are considering a purchase of a $150,000 home. A 1% increase in Mortgage Rates from say 6% to 7% will cause your monthly mortgage payment to increase by $100 a month or $1,200 a year which is $36,000 more in payments over the life of the 30 year mortgage. Also, consider the larger price break Move Up buyers get when they reap the benefits of a larger dollar discount on the more expensive home they buy than the lower priced home they intend to sell. Speak to a professional to get all the details for yourself.

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