Great Time to Buy In Florida – This makes sense.

 Jana Baldwin, Marlin Design and Construction, brings another interesting article about taxes to the board….
[Jana Baldwin is partner and marketing director for Marlin Design and Construction - Custom Residential Homes built in northwest Florida. You may visit www.marlindesignandconstruction.com to view the beautiful homes or call her at 850.545-7622 or 850.576-3978 for more information.]

Great Time to Buy Florida

ORLANDO, Fla. – March 3, 2008 – Too many buyers are focusing on home prices and waiting to jump into the market, afraid that a property bought today will be worth less tomorrow. But rising mortgage rates should also be a concern, and many potential buyers could find themselves out of luck if they wait much longer.

Jim Svinth, chief economist at mortgage firm Lending Tree, tells buyers to “ignore the headlines.” As the economy recovers, finance costs will rise. Waiting for the perfect time to get into the market may cost prospects, especially renters, more in the long run.

“The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher,” says Svinth. Any savings you might incur by a further drop in prices might be offset by rising financing costs.

Let’s take a home priced at $250,000. With a 20 percent downpayment and 30-year fixed-rate mortgage at 6 percent, monthly payments would be $1,199.10 (principal and interest only).

If the price of this home were to drop 10 percent one year from now to $225,000 – but mortgage rates rise to 7 percent – the monthly payment for a 30-year fixed-rate mortgage with 20 percent down would be $1,197.54 (mortgage and interest only) — a difference of $1.56 a month.

It’s almost impossible to predict the direction of long-term mortgage rates, but investors tend to pull back from long-term investments, such as those that feed fixed mortgage rates, if inflation appears to be a threat as it does now. On Friday, Federal Reserve Chairman Ben Bernanke admitted that the Fed viewed inflation as a concern; though he does not think “stagflation” – a slowing economy coupled with inflation – is an immediate problem.

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