Act now or hold off? The cost of waiting

You’re thinking about buying a house, replacing your car, or finally tackling that lingering debt. But then you hear all the talk about inflation, rising interest rates, and potential tariffs, and suddenly, waiting seems like a safe bet. But patience isn’t always a virtue. There are times when delaying a big financial decision can actually cost more in the long run. Let’s take a closer look at some of the costs of waiting.

Waiting to buy a home? You could pay more later.

High home prices and interest rates have pushed many would-be homeowners to the sidelines. Buying now could still be the right move, especially if your family or job situation is changing.

Here are some reasons not to delay buying a home:

• Home values generally increase over time
  If you wait too long, you might find yourself paying a lot more for the same house.

• You’ll start building equity
  Every mortgage payment helps you build equity, which is essentially an investment in your future. If you’re renting, you’re basically paying your landlord’s mortgage.

• You could refinance your mortgage later
  Even if you don’t like the current interest rates, you could refinance later if they drop to lower your monthly payment or the overall cost of your home loan.

• Life doesn’t wait
  Delaying a move can make a major life change more complicated and stressful.

• Timing the housing market is tricky
  If you sell your current home at a high price but wait to buy, any gains you made could be erased if prices continue to rise.

Waiting to buy a car doesn’t always pay off.

It’s a time-worn adage that’s still true: The value of a new car drops as soon as you drive it off the lot. So, you should definitely wait to buy a car, right? Not always. Waiting can lead to additional costs and headaches.

What to consider:

• Repair costs add up
  Maintaining an unreliable vehicle can quickly become more expensive than a new car payment. Plus, its trade-in value is likely to decrease with every repair.

• Car breakdowns disrupt your life
  Before you decide either way, consider the impact of missed work, waiting for tow trucks, rescheduled appointments, late school pickups, and relying on friends and family for rides.

• Car prices may not drop
  Kelly Blue Book recommends buying a new car now because tight inventory and potential tariffs could keep prices high. Projections for used cars depend on the vehicle type, however. In June, Carfax reported significant price jumps for pre-owned pickup trucks, electric vehicles, and hybrids; smaller increases for sedans and other models; and price drops for minivans and vans.

• Interest rates could climb, too
  Even if car prices hold steady, there’s a chance that interest rates could increase, making your car loan payments higher if you wait.

• Factor in all costs of ownership
  That means insurance, gasoline, taxes, and maintenance. This Edmunds calculator can provide a good estimate. Then use our auto loan calculator to find your monthly car loan payment.

Paying off debt: The sooner, the better

You’re committed to paying off your high-interest debt, so you start making extra payments. But then grocery, gas, and utility prices go up, and suddenly, your credit card balance creeps higher again. What should you do?

What to consider:

• Interest compounds
  The longer you carry a balance, the more interest accrues, making your debt grow and costing you more over time.

• Your money loses its power
  With inflation, the interest payments on your debt consume a larger portion of your paycheck, which reduces your purchasing power.

• Debt delays your goals
  Travel, saving for a home, and simply enjoying more financial freedom are pushed to a later date.

• Your credit score matters
  With less debt weighing you down, you could qualify for a mortgage with a lower interest rate.

• Consider consolidating your high-interest debt
  If you own a home, a home equity line of credit or mortgage refinance could help you spend less on interest. Our Consolidating Debt With Home Equity Calculator will help you crunch the numbers. Not a homeowner? The Federal Trade Commission offers tips for getting out of debt and finding legitimate credit counselors.

Bottom line: Delaying isn’t always the smart choice

Big financial decisions are about more than just the price tag. Before you decide to hold off, take time to consider what waiting will truly cost you, not just in dollars, but how it might affect your lifestyle, stress levels, and future goals.

And you don’t need to figure it out by yourself. At Flagstar, we help people make financial decisions every day. We’d love to help you weigh the pros and cons of your situation to find the solution that’s right for you.