One question we hear constantly from our buyers is does it make more sense to act now or wait another year to purchase a new home. More often than not, financially it makes more sense not to wait. To illustrate the point, we’ve put together scenarios on “the cost of waiting” for four different price points including a $350,000 condo, a $650,000 home, $900,000 home, and finally a $1,000,000 home. For these four scenarios, you can see how much more you can expect to pay by waiting here in the City of Alexandria.
For a $350k condo, at five percent down, the property value increases by 3.23% with the expected down payment amount increasing by $565. This also comes with an expected interest rate increase from 3.875% to 4.125%. If you were to buy today, the total monthly expenses would sit at $2,300 whereas if you were to wait a year, that number would climb to $2,453.
For a $650k home also at five percent down, the property value increases by 3.23% with the down payment increasing by $1,050 dollars. Like the $350k condo, this price point also comes with an expected interest rate increase from 3.875% to 4.125% from buying now versus in one year. Mortgage insurance costs also see slight increases with both the $350k condo and the $650k home. The total monthly expenses currently are $3,707 with that number increasing to $3,991 if you were to wait a year to buy.
Questions about financing? Reach out today and we can put you in touch with one of our great lenders!
Meanwhile for a $900k home at 15 percent down, the property value increases by $29,070. The down payment also jumps by $4,361 if waiting another year. Interest rates for these higher end properties also rise faster with a rate one year from now sitting at 4.375% instead of the 4 percent it likely is now due to it being a jumbo loan at 15% down. The total monthly expenses for a $900,000 home increase from $4,540 to $4,830 when buying now versus buying a year from now.
Lastly for a $1 million home also at 15 percent down, property value increases by $32,300 if waiting another year. The down payment increase isn’t quite as big as it was for a $900k home, but still sees an increase of $3,876. The total monthly expenses for $1 million home also see a big jump with the number climbing from $5,043 to $5,339 if waiting a year.
Questions about buying a home for the first time? Get the inside scoop by downloading our first time buyer’s guide!