Buying a home in Down Market

If you wait to buy in the market Down fall in housing prices?

Everyone wants to know what the best time in the market when buying a home. It is just natural. Especially if you're thinking about buying a down market, where home prices are falling. I wonder how low they will go and if you wait, right?

Some buyers should immediately Home Purchase
You are probably thinking: "Of course, she wanted to say that. It Realtor, and agents always say:" Right now the best time to buy. "Well, here is why:

* If you are a seller, who wants to move to a more expensive home down the market, now may be a better time. The longer you wait to sell, the lower the price of your home can be affected.
* If you can arrange alternative accommodation, smart strategy to sell now, just wait a few months and then buy a new home.
* If you sell and buy at the same time, you're still ahead, because the game is reducing the price of the purchase exceeds the loss from the sale.

Consider the "loss" from the sale of your current Home
For example, say your present house is worth $ 300,000, but due to high inventory and few buyers, it is necessary to reduce the prices by 10%. Thus, instead of receiving $ 300,000, you will receive $ 270,000 and "lose" $ 30000.

Consider Your Real Profit
Now consider this. Say you bought this house 10 years ago and paid $ 100,000. If you're still ahead $ 170,000, less the cost of sales, is not it? (This does not take into account the monthly payments, but you have those, if you were renting, too.)

Consider the "savings" for the purchase of new housing
If you plan to go up to $ 500,000 house, which is located in the same distressed market, you probably could buy the house at the same discount of 10% or $ 450,000. This will mean that you have saved $ 50,000.

Overview of sales and purchase numbers
1. So you "lost" $ 30,000 to sell your home
2. But you "made" $ 50,000 for the purchase of your new home
3. Are not you $ 20,000 ahead?

Do not forget your Impact of interest rates
How do interest rates go? Are they move up or move down? If interest rates are near all time low and beginning to inch upwards, waiting could cost more than you think. You may not be able to afford to buy a house at any price.
# FACT: Each 1 / 2 point increase in your interest rate gives a less than $ 25,000 in purchasing power.
# FACT: Each 1 point increase in your interest rate gives a less than $ 50,000 in purchasing power.
# FACT: Each 2 point increase in your interest rate gives a less than $ 100,000 in purchasing power.

Look at the difference between the purchase price as compared to interest rates

If you put 20% and get 80% loan, so your principal and interest payments on the purchase price as follows:

* $ 425,000 sales price, to 8.25% per annum, the payment is $ 2554.
* $ 450,000 sales price, to 7.75% per annum, the payment is $ 2579.
* $ 475,000 sales price, to 7.25% per annum, the payment is $ 2592.
* $ 500,000 sales price, to 6.75% per annum, the payment is $ 2594.
* $ 525,000 sales price, to 6.25% per annum, the payment is $ 2586.

The payments are virtually identical. However, the home you can afford to buy a 8.25% is $ 100,000 less than the house can afford to buy at 6.25%. If you expect prices to decline further, perceived value may be lost as a result of higher rates.

A good strategy is to weigh the pros and cons of real estate property before making a decision to buy or sell. Do not panic over newspaper headlines. Make an informed decision. Run your own room.

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