New Homebuyer Tips
Crossland Title, Inc
Crossland Title Inc. is a Knoxville title agency providing full-service real estate title solutions. Crossland Title Inc. makes your closing seem effortless.
With more than 36 years of experience in the real estate and title business, owners Pam Rice and Beth Crox have built their reputations upon the virtues of personal service and integrity. They believe that reputation as an honest and reliable business is the recipe for success.
Mortgage Rates are Historically Low
There are plenty of would-be homeowners right now hoping to time the market and wait for home prices to fall. The trouble is, even experts have trouble correctly predicting the trajectory of the housing market. There were plenty of people predicting that the housing market would slow down and cool off in 2021 (and we can see how that turned out).
The downside to waiting for prices to fall is that you risk mortgage rates rising. One thing we know for sure right now is that mortgage rates are at a record low. Using BankRate’s loan calculator, consider this scenario:
You buy a home today for $450,000 at 2.875%, with 20% down and a 30 year mortgage. Your monthly payments will be $1,493 before taxes, insurance, etc. and over the lifetime of the loan, you’ll end up paying (loan+interest) $537,830.
Let’s assume you purchase this home for $410,000 due to a cooler market in 2022. If the mortgage rate goes up by a single percentage point over the next year (a rate of 3.875%). With all other factors staying the same, your monthly payments will be $1,542 before taxes/insurance, and your total amount owed would be $555,380.
In other words – by paying $40,000 more while locking in a lower mortgage rate, in this scenario, you actually save money over the life of the loan by buying today. Again: it’s impossible to predict exactly what will happen, but you won’t necessarily save money by waiting for the housing market to cool. In fact, you might still pay more.