A Look at Buying Now vs. Buying Then; Why You Can’t Afford to Wait

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It is widely known around the world that real estate in the US is at the best point it has been in decades – especially from the standpoint of a buyer.  But when you look at how the numbers work out – it REALLY looks good and it is a great way to see just why buying now is the best it has been for the past five to ten years. 

Here are the facts.  We know that interest rates are so low that buyers are walking away with practically free mortgages.  We know that housing values have declined to a point that buying a home now is a surefire investment that will come back later and mature very nicely once the market bounces back.  We know that housing inventory is largely overstuffed because of the plethora of foreclosures on record the past few years plus other factors contributing to the fact as well.  But how does all this look when you plug in actual selling prices, interest rates, down payments and monthly payments? 

To help show you why buying now will yield the best ever deal quite possibly in your entire lifetime, we have put together a comparison of a home that was sold in 2002.  Considering the market environment in both 2006 and 2011, we see how the owners got very different results on each respective selling date.  The numbers are staggering! 

Home Bought in 2002
Price of home when originally bought in 2002: $285,000
Interest rate: 6.5%
Conventional loan 20% down payment amount: $57,000
Monthly payment: $1,441 (principal and interest)
Loan payout for the life of the loan: $575,803

Sold to Another Owner in 2006
Selling price: $580,000
Interest rate: 6.5%
Significant remodeling changes made to the home
Conventional loan 20% down payment amount: $116,000
Monthly payment: $2,932 (principal and interest)
Loan payout for the life of the loan: $1, 171,800

Sold Again in 2011
Selling price: $245,000
Interest rate: 5%
Conventional loan 20% down payment amount: $49,000
Monthly payment: $1, 052 (principal and interest)
Loan payout for the life of the loan: $427,782

The savings are astronomical when comparing market conditions then to now.
If you bought this house ten years ago, the savings add up to over $148,000!
And if you bought the house while it was at the top of the market, the savings are an unbelievable $750,000.  That’s three quarters of a million dollars in savings alone.

This is the same home.  When you realize how much the prices, payments and payouts fluctuate – it makes you wonder why you haven’t gone out and grabbed the opportunity to buy now, doesn’t it? Either way you look at it, buying now will end up in a fantastic return on your investment.  What’s more is that there is no telling how long this phase in our real estate industry will last.  We are starting to see some upward changes in the housing market, with prices coming back up very slowly and the depreciation cycle beginning to level off.

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