I'm sure if you are a first time buyer or in the market for a home, there isn't a day that goes by in which you don't hear about how low the interest rates are today (and how they WILL go up in the future, it's just a matter of WHEN).
Today I want to give you perspective on how low interest rates translate into more buying power and lower monthly payments.
Just how low are rates today? Well, 30-year fixed rate mortgage rates are around 5% (today, last I checked, 4.8%). Last year rates were as high as 6.5%. Around 1995, rates were around 9%. And if you compared interest rates to a horror movie, the early eighties would be like The Shining with rates reaching as high as 18% (All looking and no buying makes Jack a dull boy).
If you want a loan payment around $800, at 5% you can afford $149,025. At 6.5%, your buying power at $126,569. That same monthly payment at 9% and you will be borrowing less than $100,000.
Looking for a home in the $200,000 range? At 5% your monthly payment will be $1,074. Add $62 to that payment for each 0.5% raise in rates.
Buyers, with the interest rates low and home prices low as well, there is no reason not to get out there and find your dream home! Call me today.
Laura Ivy Blessing blogs about the Austin known and lesser known happenings with a splash of real estate savvy for today's buyers and sellers. Please call her today to consult and advise you through your next real estate transaction.
Source: Texas Realtor Magazine and Thank you JScreationzs for the image.