• calendar_month December 1, 2023
• folder What's New in Real Estate

In the competitive real estate market of California, the decision of when to buy a home can significantly impact your financial outlook. Let's delve into the numbers to understand the implications of waiting to make that crucial purchase.

Scenario Overview

• Current Property Value: $850,000
• Loan Amount: $765,000
• Loan Term: 30 years
• Down Payment: $85,000

Cost of Waiting

Waiting 6 Months

• Property Value: $879,600
• Loan Amount: $791,640
• APR: 3.48%
• Total Cash to Close: $87,960
• Monthly Prin. & Interest (Start): $5,090
• Total Monthly Expenses: $6,401
• Total Annual Expenses: $79,291

Waiting 1 Year

• Property Value: $901,180
• Loan Amount: $811,062
• APR: 6.02%
• Total Cash to Close: $90,118
• Monthly Prin. & Interest (Start): $5,347
• Total Monthly Expenses: $6,653
• Total Annual Expenses: $78,404

Waiting 2 Years

• Property Value: $944,934
• Loan Amount: $850,441
• APR: 11.17%
• Total Cash to Close: $94,493
• Monthly Prin. & Interest (Start): $6,608
• Total Monthly Expenses: $6,919
• Total Annual Expenses: $76,809

Waiting 3 Years

• Property Value: $990,997
• Loan Amount: $891,897
• APR: 16.59%
• Total Cash to Close: $99,100
• Monthly Prin. & Interest (Start): $6,534
• Total Monthly Expenses: $6,401
• Total Annual Expenses: $79,834

Key Takeaways

• APR Increases: Waiting results in higher APR, leading to increased interest rates over time.
• Cash to Close: The upfront costs rise significantly with each passing year.
• Total Monthly Expenses: Monthly payments escalate, impacting your financial stability.
• Total Annual Expenses: Waiting may cost you in the long run, with accumulating expenses.

In conclusion, the cost of waiting to buy a home is more than just the risk of rising property values. It translates into a tangible financial burden. Considering these factors, it's crucial to weigh the benefits of waiting against the potential long-term financial consequences.