Cost of Saving.

From my discussion with a lot of clients, there is a common thought which is the need to save prior to purchasing a house. It is a good thought to want to save. However in today’s market with a lot of programs available to facilitate home ownership.

I have been explaining why waiting to purchase in order to save might be costly in a dynamic market.
For instance, a property currently selling for $250k, one decides to save 10-20k in order to buy the same house in a year. Let’s assume that one is able to indeed save 20k which is pretty good. Now let’s assume as well that given that the market is very active that the property increases to 300k. With an appreciation of 50k, the property cost an extra 50k from the previous year. Let’s do a a quick math: 50k-20k= 30k. Now the cost of saving here is 30k.  Saving 20k costs us 30k. We are not counting inflation as well as possible higher monthly payments.
Saving is important but prior to wanting to save one must wonder about the cost of saving first.
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