Good morning, what is the cost of waiting to buy a house?
There are three main factors that go into determining the true cost of waiting to buy a house. The price of house which is the first factor because the cost will continue to go up for the foreseeable future. The interest rate this factor will continue to go up over time, unless the US has an unforeseen economic situation. A final factor that most renters don’t always consider is the tax deduction benefit. It is true a $2000 rent payment is equal to a $2350 mortgage payment or higher in some income situations. I have lenders that can put together a really nice spreadsheet that shows all of these factors side by side. It will show you a very specific analysis about comparing your current situation with making a change to a new house or a change from renting to buying for the first time. Showing a “what if” example over the next 5-15 years might be helpful for you in making a financial decision that is the best long term decision for your family.
* Lender question of the week:
We have great credit over 700 scores. I wonder if we should still wait to apply for a mortgage because we still have debt. Can you tell me is it helpful to wait until most or all of our debt is paid before starting the loan application process?
Hi, in most cases waiting to pay off debt might not be the best option. For example, if you have a low down payment saving for a larger down payment might be best because it can save you closing cost expense. An example of why you might want to pay off more debt and wait would be to consider the monthly debt payments which might be limiting you to purchase more house. For example, if you paid off a loan that had a $100 monthly payment this would allow you to buy 20k more in a house price. Feel free to call me and I can explain more after I have reviewed your financial profile such as the debts, your income and total down payment from savings.