Are you waiting to buy because you think prices are declining?

Let’s say someone is currently looking at a $200,000 property. If they put 20% down and if interest rates are currently at 4.5%*, their principle and interest payment would be $810.70

If that same borrower told you that they were going to wait for prices to fall further, we know that interest rates have to go up, and even if the market slips another 10%, and rates go to 5.5% (still very low), your new payment would still be $817.62.

If rates go to 6.5% (which they did back in late 2008) then the payment would increase to $910.18 per month. The borrower would be paying $36,000 more for that house over the life of the loan verses what they would pay at 4.5%.

Since rates are at the lowest point ever, and we know that they have to go up, assuming that rates will rise, it may not make mathematical since to wait.

*please note that this is not an advertisement of interest rate. This is for comparison purposes only.

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