This month- let’s talk about price versus cost of a home.
As a seller, you are most concerned with the short term price of your home. When you sell, you get your money and go.
However, as a buyer, you must be concerned not just with the price, but also with the cost of buying a house. Today’s historically low interest rates are great for home buyers. But most economists agree that in the not too distant future, interest rates will go up.
Today, a $250,000 house at 3.5% interest will give you a principal and interest payment of over $1,100. Let’s assume that the economists are correct, and next year’s interest rates rise by 1 point to 4.5 percent. This would raise your monthly payment by $145.
Today’s $250,000 house will most likely increase in value. Using 5% appreciation, your monthly payment would rise to over $1,300 a month. This is a $208 a month increase, and an increase of over $2,500 a year. If you keep the loan for the full 30 years, it is an increase of $75,000.
If you want to discuss buying or selling a home, feel free to contact me for more information.[contact-form-7 404 "Not Found"]