But I'm Waiting on 4.5% Interest Rates Before I Buy

As an agent, have you heard that one recently? Are you a buyer that is currently saying this or something similar? If so, I ask you, WHY? What are you waiting for, exactly? If you're trying to 'time' the drops in interest rates, it's like playing Russian roulette with your payments. Don't do that! Focus on what and where you want to buy, getting a good price for it, and buy NOW!

There are many reasons not to wait on lower interest rates in order to buy your home. If you're reading the news, you'll know that the terms of lending are changing on almost a daily basis. Not by much and not anything major, but if you're in a category that is 'on the fence' of getting cropped off for that BEST RATE plan, or worse, of lending at all, rating on a lower rate is only hurting your attempt at getting into a home.

If you are a first time home buyer, it is reported that on Tuesday, Feb 17th, 2009, President Obama will sign into law the new Stimulus Plan, which includes an $8,000 tax credit for you. If you continue to wait on a better interest rate, then you may lose out on a pretty major tax credit. What's the old saying there, "Pennywise but Pound Foolish," isn't it?

Finally, and probably the most important of the reasons, is that when playing the interest rate game, you stand to lose a lot more than you'll ever gain. Here's what I mean.

Today, the best, on average, interest rate that you can get is about 4.75%. If you'll there and you're waiting on a drop to 4.5%, that's a difference of only about $14 a month on a $100,000 mortgage. Sounds good, right? But, what if the rates actually climb? What then? If the rate only goes up to 5%, that makes the monthly about $537 a month, or a $16 JUMP in monthly.

Let's take a bigger swing. If rates were to drop to 4% (which ain't gonna happen without Gov't intervention, IMO, Folks), on that same $100K note, you'd have an estimated payment of about $480/month, or a $41 savings compared to today's 4.75% interest rate. But, if rates shot up to 5.5%, then your monthly payment goes to about $568/month, or $47 INCREASE in monthly.

One final thing that a lot of the "rate waiters" are missing is that they are putting more emphasis on the monthly payment than the home. Yes, the payment IS important, but while you're playing the waiting game on interest rates, the home of your dreams could be going to someone else. Are you prepared to lose that potential in order to save $10-20 a month on a payment?

Food for thought!

Here are five more posts by Roger that you may have missed.

1. Things to Know Before Calling a "We Buy Houses" Ad

2. Do I Need a Buyer's Agent When Searching For a Home?

3. Buyers, Get Off The Fence!

4. Invest In Yourself FIRST!

5. Snuggies Blanket the World!

Call Roger for all your Real Estate Needs.

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On the Web: RogerAJohnson.com

On the Phone: 828-568-2121 ext 310