Waiting To Buy Does Not Usually Make Sense Financially


Today I'm going to show you in 90 seconds why it makes more sense to purchase a home now financially than it would be to wait so I created this spreadsheet here that compares now and sometime in the future. In this example we're looking at a $500,000 house and comparing to waiting two years to purchase the house so in today's scenario it's a 7% interest rate with a 5% annual appreciation which is pretty that's pretty normal and that gives us a $2,661 a month principal and interest payment. Over the course of two years of ownership from now until the future I will have made $51,000 in equity due to the 5% appreciation rate and I will have saved $8,400 on my principal balance that's been paid down. Fast forward two years and I buy the house then instead of now the purchase price is $551,000 versus $500,000 due to that appreciation and so my loan balance is significantly higher and even though my interest rate now in this scenario is also 1.5%, lower I'm only saving $157 a month on my principal and interest. So, over two years I've saved $3,800 or so in my principal and interest payments, but I've lost $8,000 that was paid down. I've also lost $51,000 in equity that I did not gain because I didn't own the home over the course of two years. So after two years, my net loss by waiting is $56,000 so you can see financially it makes much more sense to purchase now under almost all scenarios than it would if you were to wait.

Ryan Ward, Broker
Cell: 404-630-3187

Ryan Ward is the Managing Broker and Owner of Premier Atlanta Real Estate and the School Director of Thrive Real Estate Academy.

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