Weighing COST over PRICE is Significant
We have often advised buyers to look at the COST of purchasing a house more than the PRICE of the home. Price is only part of the cost equation. The other piece, assuming you are not an all cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. It may allow a buyer to increase his price range and put more power behind an offer. Recently, more economists are begun talking about the possibility that mortgage rates could begin to increase this year. This is influencing more buyers as they see multiple offers on homes they want to buy.
We do not attempt to predict future interest rates. We leave that up to the experts in the field. However, we want our clients to understand the impact of potential interest rates on the cost of purchasing a home if they do rise. Here is a simple table that shows the COST of a home could increase if intrerst rates should rise if a purchase decision is delayed.
The Bottom Line
Many purchasers think they can wait because prices are stable and/or are rising only slowly. In today’s market, deciding whether or not to wait should be determined more by where interest rates, and therefore the COST to buy a home, is headed.
F. Hill Slowinski, JD, REALTOR® in DC, MD, and VA
W.C. & A.N. Miller Realtors, A Long & Foster Company
Christie’s International Real Estate
4701 Sangamore Road, Bethesda, Maryland 20816
Tel: 301-229-4000 Fax: 301-229-4015
Direct: 301-320-8430 · Cell: 301-452-1409
Email: HSlowinski@LNF.com · Web Site: www.HillSlowinski.com