Mortgage: Should I Wait to Buy a New Home

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Mortgage rates are more competitive than ever. Should you try to buy now, or wait?

The lower theย mortgage rateย you manage to lock in, the more affordable your home will be for many, many years. And right now, mortgage rates are extremely competitive. On August 2, the average rate for a 30-year fixed mortgage was 3.12%. For a 15-year fixed mortgage, it was 2.77%.

Granted, these aren’t the lowest rates we’ve seen recently. In mid-July, the 30-year fixed mortgage actually droppedย below 3%ย for the first time ever. But historically speaking, today’s rates are still very competitive. Therefore, it begs the question: Should you buy a new home today? Or does it pay to wait?

Why now’s a great time to buy

Today’s mortgage rates are quite favorable for buyers, and that’s the primary reason it pays to purchase a home in the current climate. If you take out a 30-year fixed $200,000 mortgage at 3.12%, yourย monthly paymentย will be $1,415, and you’ll pay a total of $108,283 in interest over the life of your loan.

Now that may seem like a lot, but consider this: Back in May, the average rate for a 30-year fixed mortgage was 3.63% — also competitive, but not as low as 3.12%. With that mortgage rate on a $200,000 loan, you’d be looking at a monthly payment of $1,471 and a total of $128,644 in interest over the life of your loan. That’s a big difference, and it’s also why it could pay to buy a home now.

Fool.com

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