The Case Against Waiting to Buy

Consider a typical home that sells for $300,000. You put down 20% and get a 30 year fixed rate mortgage at today’s rate of 5.25%. Monthly principle and interest come to $1306.77. Let’s say that 12 months from now the same house goes for 10% less, or $270,000. But by then recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise just one point, to 6.25%, your monthly payment would be $1312.44 and you’d have saved NOTHING. Meanwhile home prices might steady and seller might become less willing to negotiate. To boot, you have spent a year living someplace you’d rather not be. - by Amanda Jensen and Claire Zickuhr, Mortgage Consultants, Columbia Mortgage, LLC