If you can qualify now, buy now. The difference between 3.5% down for FHA and 10% down is minor. If you get a 30 year mortgage, you will still pay the FHA mortgage insurance.
Just using pure base numbers, if you finance $183,000 at 5.00% for 30 years, you will pay about $984 per month for principal and interest. That would be 3.5% down on a purchase price of $190,000.
Let's say you finance $171,000 at 5.00% for 30 years, you will pay about $917 per month for principal and interest. That would be 10.0% down on a purchase price of $190,000.
Just a $67.00 difference in the monthly payment. I would rather keep my $12,000 in the bank and cut back somewhere for the extra $67.00.
But most important is don't count on rates being where they are now in 2 years. I would bet my bike rates will be much, much higher. All the experts predict we will enter a period of high inflation once the economy starts to truly recover. Rates will skyrocket.
By the way, if you put 10% down and finance $171,000 at the higher rate of 6.00%, your payment will be about $1,025.00 per month. How about that? Paying more per month than you would have paid with 3.5% down.
Without question, if that's the only thing holding you back, buy now.
Carol Lloyd, CLU, ChFC, FLMI
"In the Business of Educating My Clients About Mortgages"
First Hallmark Mortgage