To Buy Or Not To Buy

U-Prosper Education Center

To Buy Or Not To Buy

A question many renters and young Americans living at home are asking themselves. What makes buying today better than tomorrow?

Today’s housing market is a sellers’ market meaning there are less homes for sale than people that want to buy them. Sellers will receive multiple offers on their homes and in many cases the home will close at full asking price or more. So why is today still a better time to buy than next year?

Let’s look at a simple example of buying a home today versus waiting one year to buy that same home, considering the fact that both interest rates and home prices are increasing:

As you can see waiting only one year can have drastic effect on the total amount paid over the lifetime of a conventional 30 year loan.

Hear are questions I receive everyday from people who think they can’t afford a home:

What if I don’t have money for a down payment?

Many programs allow for gifts or grants for the down payment.

I thought I had to put 20% down to buy a home?

Down payments vary on the program. VA loans offered to veterans have no down payment. FHA requires a minimum of 3.5% down payment.  Freddie Mac/Fannie Mae have programs with as little as 3% down.

Isn’t my credit score to low to buy a home?

There are Mortgage programs with a minimum credit score requirement of 580.

If you are renting right now, you are already paying a mortgage, just not yours. Benefits of owning a home are; tax credits for property taxes and mortgage interest paid for the year, and homes appreciate over time unlike automobiles or most anything else we buy .

So whenever I get asked the question “Is now a good time to buy a home”, I say, there really is no bad time to buy a home.

*- Rates being used are for informational purposes only, actual rates may vary.

**- Mortgage insurance can be removed from some loans when 22% equity has been obtained.