Dan Hubrich with Castle & Cooke Mortgage is back! Today he is discussing whether you should buy a home now or wait to save up more money for your down payment.

I hear from a lot of clients that they want to wait a year or so to buy a home while they save up for a down payment. While this may be a noble idea, often times it doesn’t save you any money and can even put you in a worse financial position. Here’s why. Right now the Utah real estate market is very hot with all signs showing that it will continue. We also have rates that are near record lows. They won’t stay low forever though. So let’s assume someone is trying to buy a $325,000 home. Let’s also assume that in a year from now prices will be 5% higher and rates will be .5% higher. We don’t have a crystal ball but based on current trends that’s a very realistic scenario.

In that scenario, your payment would be $178/month higher than it would be today! In order to save $178/month on a loan through a principle reduction, you’d need to put an additional $37,000 down! So IF those 2 things were to happen with rates and appreciation, not only would you not actually save any money each month, but you’d be worse off since you’d miss out on a years’ worth of appreciation. Again…we can’t see the future but this is at least something to think about and take seriously when you are running budgets and calculations. 

We have a lot of programs that can help people buy a home now with little to no down payment. Call me anytime to run some numbers and see if something may work for you.

Contact Dan or myself for more info!