Zorell's Industry Updates

Should I Wait For The “Double-Dip”??

Let's be real people - how long can this actually last?  We are currently witnessing the best interest rates the nation has seen in over 50 years.  For the first time in a long time - the average W-2'd consumer has the advantage.  With the price of homes at or near it's low and interest rates that are definitely at theirs, it's seems like the Real Estate Perfect Storm has finally struck for the consumer.  When you look at the numbers it all makes sense.  

You are a first time homebuyer and you are a deal shopper.  You want to buy but only at the absolute perfect time (The Bottom).  Sound familiar?  You're not alone. 

Here's a scenario you might find yourself in.  You have found the perfect house but it's a little bit out of your price range.  Let's say about $50,000 higher than you originally wanted.  Today you could get a loan around 4.625% today.  For numerical sake – let’s examine a loan amount of $450,000.  Principal and Interest payment @ 4.625% on $450,000 = $2,313.63. 

But wait, that’s TODAY’S pricing!!!  If you were to patiently wait for the price of homes to drop or to “double dip” you are taking a big gamble – you are hedging your bet that interest rates will remain this low forever…And they wont!!  Don’t forget that rates (especially in this market) have been known to change from .75 to 1 point overnight!! 

You may be the biggest saver on your block – by waiting around and getting that same house for $400,000 instead of $450,000 but what you didn’t notice is what shocks most people.  In the time that you waited for the price to adjust down – you also let the rates adjust back up.  For argument sake, let’s say the rates went back up to 5.625% in the time you waited for the “double-dip”.  If this were the case, your new payment P&I on your new price of $400,000 would be $2,302.63 saving you a whopping $11 per month. 

Now you tell me… does it still make sense to wait around for the double-dip?? 

RATES HIT 50 YEAR LOW - 4.625 NO POINTS / NO FEE's