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Buy Now or Pay Later? What’s At Risk If You Wait?

Interest rates have been at record low levels, recently as low as 3.5 percent, but how long will this last?  And should you buy now or wait until the “perfect” time?

2014 Housing Predictions and Outlook

The Tampa Real Estate Insider

Interest Rates on the Rise:

According to Freddie Mac’s weekly mortgage rate survey, currently rates are at 4.2 percent.   Financial experts expect rates to near 5 percent before the end of the year and to reach 5.5 percent to 6 percent in 2014.

The difference between 5 and 6 percent is $67,746 on a $300,000 30-year mortgage.

Let’s take a closer look.

At 5 percent a home buyer will:

  • Have a mortgage payment of $1,610.46
  • Spend $279,769.69 in interest
  • For a total of $579,569.69

At 6 percent, the same homeowner will:

  • Have a mortgage payment of $1,798.65
  • Spend $347,515.44 in interest
  • For a total of $647,515.44 

Historically, home interest rates have been 6 percent-7 percent and will no doubt return to that level when the Federal Reserve begins to ease up on buying mortgage-backed securities.  According to, this will begin happening once unemployment levels drops to 6.5 percent.

Other issues such as rising home prices, consumer credit, inflation and economic issues also will make interest rates rise.

The Perfect Time to Buy:

Is there such a thing as a perfect time to buy?

The perfect time for any home buyer is when the buyer is emotionally and financially ready for homeownership.  People buy for a variety of reasons including new jobs, unemployment, relocating for work, a pay raise, death of a spouse or family member, divorce, the birth of baby, to enter a better school district, becoming empty nesters, elderly parent moving in, illness, and natural disasters.

What’s At Risk If You Wait?

So should you buy now or wait?  Here are some other things to consider.

Home values are rising and will continue to increase.  Between August 2012 and August 2013, home prices in the U.S. rose 12.4 percent  according to data analysis firm CoreLogic.

2014 Housing Predictions suggest next to spring, autumn is the best time to buy.  During the recession, there was a large inventory of homes.  This year, however, there is a shortage.  Moving this time of year makes it the perfect time to take advantage of year-end tax breaks.

As Peter Grabel, a mortgage loan originator at Luxury Mortgage Corp, told,. “The housing market has clearly turned the corner in most areas. I think a year from now people will look back and realize that this was a great buying opportunity.”

Written by Rae Catanese, Realtor

Licensed Realtor since 2002, Tampa Bay’s own Rae Catanese regularly gives expert advice and insider tips about the Tampa Bay real estate market via her blog, The Tampa Real Estate Insider. If you are thinking of buying or selling a home in the Tampa, St. Petersburg or Clearwater areas-then this blog is for you. I typically post articles once a week. To make sure you don’t miss my newest posts, you can subscribe here! Have a real estate question? Email me here!

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