“Interest rates are now at historical lows”

“Buy now to lock in a low rate”

You’ve heard that interest rates are low, but how does that translate to actually buying or selling a home?

When you’re buying, it’s simple.  You can a) save a lot of money, or b) buy a lot more house.

Let’s say you are looking at a $350,000 house with 20% down (or $70,000) for a loan of $280,000:

• At 6.5%, you’ll pay $1,769.79 principle & interest each month for a total of $357,124.57 in interest paid over a 30 year note.
• Lock in at 4.5% and you’ll pay $1,418.72 principle & interest each month for a total of $230,738.79 in interest paid over a 30 year note.

WOW, that’s a savings of  over $350/month
& $126,385.78 over the life of a 30-year loan!

But that house down the street is so beautiful… and just out of our price range.  Or is it?  If you need to stay just under $1800/month for principle & interest, your budget just rose from $350,000 with 20% down to a $420,000 house with $70,000 down or a $525,000 house with 20% ($105,000) down!

• At 4.5% with on a $420,000 house with $70,000 down, your principle & interest payment on a $350,000 loan is just $1,773.40/month.
• If you can afford 20% down (which most lenders prefer), you can afford a $525,000 for the same loan!

If you’re selling, it means that your pool of buyers is potentially larger, and you need to market to this idea!

So, are you ready to house-shop this spring!?