The Clinton County real estate markets have benefited tremendously from a fiscal policy that reduced interest rates and boosted our local markets… Like Plattsburgh, NY. In 2017 we can expect an increase in interest rates to counter the risk of rising inflation.. Long story short…. If you are thinking about purchasing a home, act now. The cost of home ownership will only increase as interest rates rise.
A wonderful perspective was brought to my attention by a very reputable financial planner. He said, “When you lock into a mortgage, the cost of the home and payment are also locked in. Over time, the cost of homes and interest rates will rise. The question is not, am I ready to purchase a home but how much more money will it cost me if I wait?
No truer words have ever been spoken.
To clarify this topic I decided to run the numbers on a scenario. 1 transaction where the buyer purchased a $150,000 home now with no money down at 3.875% and another purchase (2 years from now) at $155,000 with $10,000 down and an interest rate of 4.5%.
By waiting and utilizing a $10,000 down payment the client had spent $10,000 more immediately due to the down payment and an additional $10,558.80 in mortgage payments due to the increased cost to purchase and increased interest rate.
To take this thought a step further, The client paid 24 extra months of rent… will pay off the home 2 years later… AND not see the benefit of rising home values in the first 2 years.
While my opinion remains neutral and it is very important to look at each case independently, the theory does hold true. If you are looking to purchase a home, contact a Plattsburgh mortgage professional today to discuss your options.