PUTTING OFF THAT HOME PURCHASE COULD BE COSTLY

With interest rates having spiked up slightly in the past few weeks purchasers of homes have decided to postpone their purchase until again. That decision could be very costly. Consider this example:

     If the loan amount was , say, $150,000 at 8%, today, then the monthly payment for principle and interest would be $1,100.65. By postponing the purchase just one year a buyer could very well see his/her loan amount go from $150,000 up to $160,000 due to appreciation in value alone. And, true enough, the interest rate could come down again to 7% in which case the monthly principle and interest payment would be only $1,064.48 or a 'saving' of $35.42 per month - better than the $150,000 at 8%. But, even with those savings each and every month it would take more than 23 years to make up for the $10,000 increase in the loan amount due to appreciation in the home's value.

     The payment of $1,100.65 at 8% if paid for all of 1998 would produce deductible interest of $13,207.80 from one's tax return. A family in only the 30% tax bracket would see a tax refund of $3,586, while the rent they pay this year will yield NO tax deductions.

In most cases, waiting is losing.

     With multiple offers coming in on many listings [ some of them over the original listing price ] it would probably be a good idea to call your favorite real estate agent and make some moves to get into that home of your own, soon.

By Mitch Hackney

Mortgage Online at 425.com   Mortgage, Direct Line & Voice Mail, Bellevue, WA

Background: Mr. Hackney has been originating home loans for over thirty years. and he conducts clock hour classes for real estate agents through his school of continuing education known as THE REAL ESTATE NAVIGATOR.

Other Articles: Negotiation Strategies for Purchaser of Residential Real Estate, No Cost Streamline Loans

Call Us: Toll Free: 1-866-449-7263
Got a question? Email Us

Open 8:00AM - 8:00 PM - 7 days a week