Skip to main content

Indecision's Worst Enemy: Facts

There's an old song by The Clash called "Should I Stay or Should I Go?" that has a very fitting line for so many in the potential homebuyers pool, and it goes like this: "This indecision's bugging me."  I'm not talking about indecision that results when you're faced with having to choose between going to Olive Garden for the endless-salad-and-breadsticks combo or Red Robin for the bottomless basket of French Fries.  Nor am I talking about an indecision that occurs because you're forced to choose between a mid-century modern or a rambling ranch home.  

The indecision that so many potential homebuyers are experiencing is the result of just not knowing the down-and-dirty facts - and while they are hemming and hawing, they continue to rent and home prices continue to increase.  Let me give you an example:

On a house that costs $200,000, do you know the difference between the monthly payment if you put 3% down versus 10% down on a 30-year mortgage?  Before you answer that, though, what's the difference in dollars between 3% of $200,000 and 10% of $200,000?  That's pretty major, right?  A 3% down payment is $6,000, while a 10% down payment is $20,000 - a spread of $14,000!  So with THAT BIG of a difference between the down payment amounts, there should be an equally considerable difference between the monthly payments, right?  The difference is - are you sitting down for this - only $167!  I'm not trying to say that $167 is chump change - it certainly isn't, especially when you're on a budget - but it's probably easier to find a way to come up with that $167 difference each month than it is to come up with $14,000 in one shot.  

The average first-time homebuyer stays in that first home less than seven years.  In that time, the homeowner is not going to see a significant difference in the grand scheme of things between having put down 3% or 10%.  However, during that time, the $14,000 the homeowner DIDN'T have to spend by putting down 3% can be used for a lot of other things - no indecision there, right?

So, if you're in the potential homebuyers pool, take one last lap for old times' sake, climb out, towel off, and come talk to us.  If you're wearing a Speedo (gentlemen), we'll ask that you change clothes, too, before you come visit us. 

Comments

Post a Comment

Popular posts from this blog

The Naked Truth About Home Buying

It’s highly likely I’ve already written about this, but I’ll try to make it entertaining at least.   There’s a guy who works in ou r office who suffers from kidney stones – and from what he’s described, “suffers” might even be a little too tame a word for it.   As an aside, though, when you ask him how painful the experience is, he gets an odd smile and says, “It’s the most intense pain I’ve ever experienced, but it’s hard to describe.   I’ve heard a lot of people compare it to the pain a woman experiences while giving birth.   To that, I must say, those people are big, fat liars!   I’ve been in the presence of a woman giving birth, twice, and her pain has to be 100 times worse.   They’re passing the equivalent of a Buick.   I’m passing a pumpkin seed.”   He’s always been a colorful fellow. He’s had this wonderful condition for over a decade now, and the stones make their appearance about every 18 months or so.   Up until recently, ...
Post a Comment
Read more

Numbers Don't Lie, But Wherein Lies the Truth? (Posted November 21, 2016)

Said with enough conviction, you can make almost anything sound true.   Preface the fabrication with “according to a recent bi-partisan government study,” and you’re three quarters of the way to selling the lie to a lot of people.   Seriously, try this. The next time you’re at a dinner party or having coffee with friends, pepper this little tidbit into the conversation: “I read something really interesting the other day.   According to a recent bi-partisan government study – I think it took them three years to get it all done – middle-aged men who drive either a Toyota Camry or a Honda Odyssey have more testosterone than younger men who drive either a Ford F150 or a Dodge Charger.”   You’ll get some raised eyebrows and looks of mild disbelief, but don’t let that deter you.   Just lift up your hands, palms outward, and say, “I just think it’s interesting, and it makes sense when you think about it” – and then change the subject to something completely u...
Post a Comment
Read more

Couching Your Savings Correctly (Posted July 25, 2016)

I recently read an article online about a gentleman who set a goal to purchase a home and then mapped out very specific steps as to how he would reach that goal.   Personally, I was extremely impressed by his discipline and foresight.   His goal had two parts to it: save $150,000 for a down payment and purchase a home.   Before you choke on your coffee or spit soda through your nose, let me disclose here that the gentleman who is the subject of the article was purchasing a home in the New York City area.   Now that your blood pressure is returning to normal and you’ve spared your freshly ironed white shirt from staining, I’ll give you a breakdown of his plan: •   Starting in 2007, he looked at his annual salary and then took a look at the amount of credit card debt he was carrying; he cut back on as many expenses as possible so he could pay off that credit card debt in the first year.   Touché! •   He kept his lifestyle scaled back to the poin...
Post a Comment
Read more