Interest rates have been at historically low levels this year due to the COVID19 pandemic. Many people have taken advantage of these great rates by purchasing a bigger or more expensive home with the same or more affordable payment. And even more people have taken advantage by refinancing their loan into a great low rate. However, even with rates at extremely low levels there are still many people wondering if it’s a good idea to wait and see if rates get better before purchasing a home or refinancing.
One thing that is not often considered when it comes to playing the waiting game with interest rates is the amount of money you could be saving while you wait for interest rates to lower.
Even if rates do improve in the future, the money that could be saved during the waiting period may be significant. A few hundred dollars saved per month could add up to potentially thousands before a lower rate opportunity arises. The forecasted appreciation is 2.0% in just the next months. This means a home worth $350,000 today would be worth $7,000 more in 6 months.
If you are playing the waiting game you are missing out on the potential appreciation and ammonization of your home. It could take many, many years to recoup the money you have lost.
While it is true that we don’t know if rates are going to go lower, we do know that they will eventually go higher. Why risk the chance of missing out on a great low rate and savings each month?
It could take a long time for the savings of a lower rate in the future to make up for all the money that was lost by waiting for interest rates to lower again. And remember, there’s no guarantee that rates will go lower.
Besides should rates drop significantly, we can always refinance you in the future.
It’s important to weigh the individual options for your situation and I’m here to help you do that. If you have any questions on a home purchase or refinance give me a call, 801.206.4343. I would love to answer any questions you have and discuss the best option for your specific situation.