Boise First-Time Homebuyers – Wait or Buy?
Several upcoming changes will soon increase the cost of buying a home.
On March 31st, the Fed will stop buying mortgage-backed securities.
The Fed has purchased $1.25 TRILLION (yes, Martha, that’s a “T”) of MBS in a successful effort to keep mortgage interest rates low and thereby “stimulate” the economy.
(dunno about you, but I’m not feelin all that stimulated!)
No one knows for sure, but removing this “liquidity” from the mortgage market is forecast to result in mortgage interest rates rising to as high as 6% by the end of 2010.
On a $200,000 mortgage, going from a 5% to a 6% interest rate increases your monthly payment by $125, which totals a stunning $45,000 over the term of a 30-year mortgage.
But, if you only keep your home for the typical 7 years, that 1% increase in your interest rate will only cost you $10,500.
On April 30th, the $8,000 first-time homebuyer tax credit ends.
This incredible (free money to first-time homebuyers!) program has helped thousands of Boise first-time homebuyers, with roughly 65% of all Ada County home sales occurring in the under-$200,000 price range.
On April 5th, FHA upfront mortgage insurance will increase.
It will rise from the current 1.75% to 2.25% of the loan amount, which will increase the buyer’s closing costs by $1,000 on a $200,000 loan.
On April 5th, FHA monthly mortgage insurance will increase.
This will also increase the borrower’s monthly payment.
The bottom line?
Waiting for “the bottom” could end up costing you dearly because your increased financing costs could easily exceed what you (might) save by waiting for a lower price.
If you’re buying a home for the long term as your personal residence, this may be as good as it gets.
Are you a serious first-time homebuyer who would like some straight talk about buying now?
Call or e-mail me and let’s talk!
I will tell you the truth and help you achieve your dream of home ownership without the usual sales talk.
February 8th, 2010 Posted in Buyer Stuff
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