If you’re on the fence about purchasing a home, here’s an important piece of advice: buying a home sooner rather than later could save you money.
This is because three things can happen while you’re waiting to buy:
- Mortgage rates can increase
- Home prices can increase
- You’ll delay building equity in your new home
Let’s look at just the impact of mortgage rates alone. Here’s an example of how much a one percentage point increase in your mortgage rate might affect the cost of financing a $400,000 home with a 20% down payment loan1:
|Interest Rate||Monthly Payment|
|Lower-Rate Mortgage||3.875% | 3.961% APR2||$1,504.76|
|Higher-Rate Mortgage||4.875% | 4.996% APR2||$1,693.47|
As you can see, that difference in rate could mean paying $22,000 more over the course of ten years!
Mortgage rates are currently near historic lows, but there’s no knowing how long they will last. The only way to ensure you can take advantage of these low rates is to lock in a mortgage while they’re still available.
If you’d like to learn about your options for financing a home purchase, contact us today for a free mortgage consultation and loan preapproval.
1Based on a 30-year fixed-rate mortgage with a 20% down payment for an owner-occupied single-family home. Includes principal and interest payments only; does not include taxes, insurance and other homeownership costs. Rates are used for example purposes only.
2Annual Percentage Rate