Tuesday, April 03, 2018

Waiting Will Cost More

The article below talks about interest rates but a larger cost has been demonstrated over the last three years...appreciation. Denver has averaged about 10% appreciation in each of the last 3 years meaning that a$300,000 house in 2014 would be worth about $330,000 in 2015, $363,000 in 2016 and $399,300 at the end of 2017. And most folks cannot make that up in down payment so the extra loan would probably be about $80,000 and with the projected 5% interest rate the cost of waiting 3 years is about $333 per month. The key is when will this appreciation stop and that is a matter of supply and demand. Demand is still high in Denver and supply is still low,,,but read on...

With the first quarter of 2018 in the books, the 30-year fixed rate mortgage is nearing what Freddie Mac predicted it would be in the second quarter. If this pace continues, rates will exceed the five percent mark expected by the end of the year.Denver

The Fed has had its first of an expected three raises for this year and two more are expected in 2019. While these rates are not directly related to mortgages, they certainly have an effect.

Delaying the decision to purchase or refinance could be an expensive missed opportunity. A $270,000 mortgage at 4.44% has a principal and interest payment of $1,358.44 per month. If the rate were to rise one-percent in the next twelve months, the payment would be $1,522.88.

The $164.44 increase would cost a homeowner an additional $13,812.97 in seven years and close to $60,000 over the full term of the loan.

The question facing people is "what would you spend $164.44 each month if you had acted sooner to get the lower rate?"

If you're curious to know what your "missed opportunity" could be costing you, try this Cost of Waiting to Buy calculator . Use 0% increase on price change if you are refinancing a home you already own.

So you can be the best informed consumer, it would be wise to review the statistics to see where the inventory of homes has gone and where prices have been in Denver. I carry those figures and charts with me so I can show you what the trend lines are, where if at all there are timing breaks to take advantage of, and why I believe that even though prices will continue that buying now is still a sound investment. So please contact me to set up a time to visit. Waiting is only costing you.

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