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Right now, there are many great opportunities out there for first-time buyers, with rates at a 16-month low at just under 4%. The most mismanaged variable in the buying process is usually the interest rate; people spend so much time worrying about the price of the home that they don't realize how much it costs them on the back end when they fail to lock in a low interest rate. Let's say you're 30 years old and you find your dream home for $250,000 and are able to finance it at 4%. Your monthly payment will be around $1,200. If you wait a year, prices and interest rates will likely rise; let's say rates jump to 5.2% - the same house is now $1,500 a month. While it's only $10 a day more, over the 30-year life of the loan you will end up costing yourself $100,000 extra that could have gone toward other investments or retirement.
The 30-year loan is the safest bet. As a new homeowner, you're not exactly sure what the future holds. With a 30-year down payment, you have the option to pay it down early and put extra money toward your principal. With rates as low as they are, it's a pretty ideal time to be a first-time homeowner.
If you have any questions about the many great opportunities available in this market and how you can make the most of the buying experience, give us a call or shoot us an email. We'll give you the help you deserve and get you the best deal possible!
