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Writer's pictureRebecca Richardson - Mortgage Consultant

Understanding the Cost of Waiting to Buy



Let's talk about the cost of waiting to buy your home.



Sometimes I hear from people that they feel like they maybe need to save up more for their downpayment that somebody told them that they need 20% per downpayment, when in reality, sometimes you don't have to have a downpayment, but at a minimum, you need between three to 5%, which they might already have.


What is the cost of waiting for a larger downpayment? When it's not going to make a huge difference in your monthly payment, there are two main factors that you're going to run into. The first one is appreciation. As time goes on, homes traditionally become more expensive, along with inflation. That appreciation in the Charlotte area tends to run around five to 6%, the last couple years, that's a little outside the normal most realtors would tell you that. But Charlotte, it's a hot market. And as a result, the home that you're looking at right now for 250, could very well be worth 265 are selling for 265 this time next year. So what does that mean for you? What that means for you is that about $15,000 difference in sales price is going to be about an additional $75 a month in a mortgage payment.


That's one of the things the other thing is the interest rates are always changing. Depending on how the economy is doing interest rates go up, they go down. But the good thing is, by going ahead and by now, you know the rates are low, it's a good time to buy. You can lock in your payment, you can go ahead and move into that home, start building equity, start building wealth by owning your own real estate. And not having to worry about kind of the whims of the market as appreciation goes up, meaning maybe interest rates go up and ultimately that home that you're looking at today, costing you more in the long run.



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