The Cost of Waiting to Buy a Home
Buy vs. Rent
“Should I wait to buy?” is a common question we hear when interest rates are higher than they have been in recent years. Potential buyers are concerned about locking in a high rate or purchasing a house with less house for their money. While we can’t ignore these concerns, we also want to highlight the other benefits of homeownership in a high-rate market. Settling into a home provides stability and a place for families to create memories. Homeownership also allows you to build equity that can be used towards future expenses such as home improvements and emergency funds.
While rates are higher, you’re not guaranteed to save money by renting. Rental costs are estimated to rise 8% each year which may lead to renters paying more for housing than they would if they had purchased a home.
The chart below shows expenses for a 3-bedroom home in Harrisonburg, Virginia, valued at $300,000 with a mortgage interest rate of 6.750%. Buying a home in this scenario would save nearly $1,500 each month by year 9.* Â
| Buying a Home Year 1 | Renting Year 1 | Renting Year 9 | |
|---|---|---|---|
| Monthly P&I | $1,751 | $2,000 | $3,702 |
| Property Tax & Insurance | $412 | $30 | $56 |
| Maintenance & Repairs | $125 | $0 | $0 |
| Monthly Expense | $2,288 | $2,030 | $3,757 |
There are various programs we have available to help find the best financing option for you. You can refinance your mortgage in the future when rates are lower if you apply for a fixed-rate mortgage. We also offer Adjustable Rate Mortgages that allow for less expensive payments early in the loan with potentially higher payments later.
*Annual Percentage Rage would be 7.021%. For example purposes only. Above example provided by MBSHighway.com based on local market data. Not a commitment to lend. All borrowers are subject to qualifications and loan program guidelines.
Looking to buy?
Contact contact one of our local advisors to compare options today, or get pre-approved!
