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Hedy's Hints: Looking to buy a house? Don't wait, because mortgage rates are going up

Mortgage rates are expected to increase soon, and housing prices should still decrease a bit.

The question is: Should you purchase a home now, when prices are higher but mortgage rates are lower, or should you purchase a home when prices are expected to be lower while rates are higher?

Here are the assumptions:

- 30-year fixed rate mortgage at 4.64%

- Average California home price of $291,760

- 20% down payment

As it currently stands, without a drop in home price or mortgage rate, the principal payment, insurance, taxes and interest will amount to $1,538.

A drop in the home price by 3% will lower the monthly payments of principal, interest, taxes and insurance to $1,492.

However, an increase in the mortgage rate by 0.5% will increase your total monthly payments to $1,560. It completely eliminates the lower housing price!

The lower housing price will not save you that much in comparison to a higher mortgage rate. So if you are waiting until housing prices drop, you might be shooting yourself in the foot.

Financially, it is a better decision to take advantage of low mortgages rates. The monthly savings will add up a lot faster than the lower home prices.

Hedy Goldman has lots of knowledgeable information to share. She has been practicing real estate since 1996 and is a gold award winner at Sea Coast Exclusive Properties. Hedy sells all over San Diego, but specializes in North County Coastal (La Jolla, Solana Beach, Del Mar, Cardiff, Encinitas, Carlsbad and Oceanside). She can be reached at (858) 504-2334 or her website at San Diego Realtor.