• Search for your dream home

    Our tools can help you find the house you've been looking for and our team will help with lending options.

    Find a Home
  • A fresh approach to residential mortgage lending.

    We utilize only the most recent technology and best possible practices to ensure your time working with us is as efficient as possible.

    Get Started
  • Getting your mortgage loan just got easier

    We do all the work so you don't have to.

    Contact Us
  • Your perfect home is only a few clicks away

    Secure the home loan you need now. Use our convenient online loan application.

    Apply Now

Should You Buy A Home Or Wait?

Posted on October 25, 2017 by Ray Williams (NMLS #216267).

A big topic of conversation for many in and outside the housing industry. If you have recently moved to Denver, you may feel prices are affordable or expensive depending on your frame of reference on housing costs. But one question we all wrestle with is should you buy a home or wait?

What you will see me point to is merely from a financial perspective. We all have external circumstances that may make us decide should I buy a home or wait? So the focus here will be on from a pure financial perspective.

Look first to the current cost to buy in Denver, for a single family house, at this time. You would be looking on average to spend about $497K per Denver Metro Association of Realtors. This number is up 6.3% from the same time last year, bear in mind, meaning it would have been $467K last year for the same house.

Take that information into consideration and ask yourself; should you buy a home or wait? Just taking a modest 5% appreciation over the next 5 years, that same home will cost $634K to buy at that time. After subtracting closing costs from the buy, the cumulative appreciation for that homeowner will be $134K over the next 5 years. If you put 5% down, your return on investment would be 539% on that home. So looking at that data, one would say you should buy from a purely financial perspective. That doesn’t take into account, the potential for rising interest rates and what that mortgage/down payment would be in 5 years on the same house.

One reason a person may wait, is the thought of not taking out new debt. I heard someone on a panel say he wasn’t sure he wanted to buy because he was debt free, and not sure if the home was a wise investment. But wait, what is debt free if you are a renter? You have a lease right? Unless you live rent free in your parents basement (how is the dating life?). So, you are paying “debt” you may just phrase it as rent rather than debt. Don’t you think your landlord would be ecstatic if you stay for 5 years based on the numbers above? I am a landlord, so come rent from me!

Life decisions like should you buy a home or wait should never be taken lightly, but do your research and also , analyze what the cost of not buying would be to you as well. We didn’t even get into the conversation of tax benefits of owning that home over those 5 years, which is a whole different conversation. If we can be of assistance in answering that question for you, give us a call 303-779-0591

Ray @MortgageMaestro 

 

Leave a Reply

Your email address will not be published. Required fields are marked *