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| BUY TODAY OR BUY TOMORROW? WHAT'S THE DIFFERENCE? |
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| QUESTION: |
What if I postpone entering the housing market? |
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| ANSWER: |
Assuming only modest increases in home values, interest rates, |
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taxes and insurance, your monthly payment could increase $50 |
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within six months and $80 by this time next year - |
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- for the same home! |
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This means that over a 5-year holding period you could pay an |
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additional $3,100 if you buy six months from now - |
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- for the same home! |
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If you buy next year you could pay over $4,800 additional - |
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- for the same home! |
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| CONCLUSION: |
In every investment, timing is important. All markets follow cycles. |
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Exactly when you enter the housing market will determine your |
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investment position, which will ultimately affect your investment |
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performance (gain or loss). |
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Buy now or wait? There is risk in action, and risk in inaction. Don't |
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get trapped into the "two steps forward, three back" syndrome. |
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| DATA: |
PROJECTED |
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INCREASE |
TODAY |
6 MOS |
12 MOS |
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| PRICE |
2.0% |
150,000 |
151,500 |
153,000 |
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| LTV-95 |
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142,500 |
143,925 |
145,350 |
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| 30YR_FXD RATE |
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6.500% |
6.875% |
7.000% |
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| P&I |
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$900.70 |
$945.48 |
$967.02 |
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| RE TXS |
5.0% |
195.00 |
199.88 |
204.75 |
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| INS |
10.0% |
40.00 |
42.00 |
44.00 |
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| PITI |
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$1,135.70 |
$1,187.36 |
$1,215.77 |
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| INCREASE |
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$51.66 |
$80.07 |
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| 5-YR TERM |
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$3,099.77 |
$4,804.21 |
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| Copyright 2007. Joseph A Wolf, CPA. No reprints without permission. |
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