First Time Home Buyers it's your money on the table!

First Time Home Buyers it's your money on the table!

Many first time home buyers are in a holding pattern, waiting for that "perfect" time to buy their first home. They're hoping for that combination of the lowest price and the lowest interest rate before jumping in.

If that's you, I have some advice.

1) Hope is not a strategy!

2) Take a close look at your current strategy, it's probably costing you money.

I did a post a couple of months ago about the real cost of waiting.

What is the real cost of waiting for first time home buyers?

The recent run-up in interest rates has increased the monthly cost of that hypothetical $200,000 home $90/ month or $5400 over a five year period.

FHA loans are the "loan of choice" for most first time home buyers. The low down payment requirements and easier qualifying guidelines make the most attractive option among loan programs.

FHA has announced that on April 18th they will be increasing their monthly mortgage insurance premium by .25%. If you wait until after that date to start the hunt for your first home, the tab will increase by another $41.67/mo or $2500 over five years, on that $200,000 home.

In that same period of time, home values in many markets have decreased by about 3%, so you would have gained about $32/mo or $1920 over 5 years.

So net-net sticking with this "wait n see" strategy will cost you almost $100/mo

If you're still paying rent in most markets it's cheaper to own than rent, so you're overpaying for one form of housing when there is a cheaper alternative.

Still think renting is cheaper?

Unlike some of my peers, I don't claim to have a crystal ball to predict which way interest rates and home values will go over the next few months, but I can tell you this with absolute certainty:

Home values and interest rates will do one of three things (and not necessarily in the same direction).

They may go up, they may go down, or they may stay the same. and in only one chance in three will you get better than what you can get today (one in six if you are playing both sides of the fence)

Bottom line, "IT'S YOUR MONEY ON THE TABLE, HOW MUCH OF A GAMBLER ARE YOU?"

For more valuable first time home buyer information check out our blog:

http://firsttimehome.us

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