Should I Buy Now or Wait for Rates to Drop?

 It's one of the most common questions I hear from prospective homebuyers:

“Should I buy now, or wait until mortgage rates come down?”

It's a reasonable question. Buying a home is a major financial decision, and today's mortgage payments can feel daunting.

But here's something worth considering: The right time to buy isn't determined by the mortgage rate alone.

It's about the home price, the complete monthly payment, your financial stability, the cash you'll have left after closing, and how long you expect to own the property.

What If You Buy Now?

In some markets, buyers have more negotiating opportunities than they did when homes were selling with multiple offers and few concessions.

A seller might consider a lower purchase price, help with allowable closing costs, or provide a credit that can be used toward financing.

Sometimes a seller credit toward closing costs or a rate buydown may be more useful than a similar reduction in the purchase price.

But the answer depends on the buyer, the financing program and the transaction.

What If You Wait?

Waiting may be the right choice if you need more savings, want to reduce debt, expect a change in employment or simply aren't comfortable with the payment.

And yes, mortgage rates may be lower in the future.

But we don't know when, by how much, or what home prices and buyer competition will look like when that happens.

Waiting for lower rates doesn't guarantee a more affordable purchase.

What About Refinancing Later?

A future refinance may be an option if rates decline, but it should never be assumed.

Refinancing depends on your future financial qualifications, the property's value, available loan programs and the cost of the transaction.

I believe buyers should be comfortable with the financing they accept today—not depend on refinancing later to make the purchase affordable.

My Approach: Compare the Numbers Before You Decide

I like to show clients several scenarios:

• Purchasing now with today's financing.

• Purchasing with a negotiated seller concession.

• Waiting while saving more money or improving their financial position.

We'll look at the complete monthly housing expense, cash needed to close and the financial trade-offs of each choice.

Sometimes the numbers favor buying now. Sometimes they favor waiting.

My job isn't to convince someone to buy a house. My job is to show them the numbers so they can make an informed decision.

If you're considering a home purchase, I'd be happy to help you explore the possibilities.

Karen Card
Sr. Loan Officer | NMLS #235218
The Card Team | American Pacific Mortgage Corporation
714-290-6940
www.card-team.com