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Old 05-29-2009, 02:34 PM
suavesandeep suavesandeep is offline
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Quote:
Originally Posted by JunRN View Post
Well, so far so good for me. As per Zillow estimate, my home value is now 10k more than my purchase price. It depends on where you're buying.

I guess that when the economy starts climbing up and people starts buying houses, interest rate will also climb up to 6%. At 6%, I need to pay $400 more per month.
If you check interest rate trends for the last 50 years, You will notice that during every economic downturn which is every 5-7 years the interest rates do come down. Although this time the down is a bit more due to severe recession, If you notice even in the last downturn around 2002 was in the 5% range. So only buying a house on the basis of low interest rate may not be prudent.
http://mortgage-x.com/trends.htm

One month is a small time span to check the value. If lets say one year from now your house loses value by 6%, The money you would save by taking a 6% loan on a lower principal will be higher than the lower interest rate on a 6% higher principal you pay now. You can always refinance again during the next downturn when the rates may again go down. But you cannot change the original principal at what you bought the home.

So My point is the original principal you pay to buy the home should be a more important factor in buying a home than the low interest rate.


I think you must have considered everything and made a smart choice, and this is not pointing at you. This is just a data point for others who haven't bought yet to consider.
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Last edited by suavesandeep; 05-29-2009 at 02:44 PM.
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