The Cost of Waiting…

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With the way the market has been going, people that have waited until this summer to buy a house have added tens of thousands of dollars onto the price of their home through the life of the mortgage.  Essentially, this is all because of how fast interest rates are moving upward.  In the past 2 months, average rates for a 30 year mortgage have gone from around 3.5% all the way up to 4.6%.

Take a look below at how much of an effect this can really have on the total amount you end up paying in interest, and even your monthly payment:

Before May 1

Mortgage amount: $200,000
Term: 30-years, fixed rate mortgage
Interest rate: 3.50%
Monthly payment: $898.09
Total payments: $323,311.97
Total interest: $123,311.97

Since July 10

Mortgage amount: $200,000
Term: 30 years, fixed-rate mortgage
Interest rate: 4.6%
Monthly payment: $1,025.29
Total payments: $369,103.49
Total interest: $169,103.49

In the scenario above (which is a very low mortgage for the Seattle area!), waiting just over 2 months is costing the buyer an extra $127 per month and an extra $46,000 in mortgage interest payments!  The higher the amount of the mortgage is, the more this wait is costing you.

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