Interest rates can have an enormous impact on your purchasing power as a home buyer. When we say they’re good, you need to strike while the iron is hot.
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We’ve had a lot of people calling us lately and asking what it means when we say that interest rates are so good right now. Here’s an example of how interest rates can impact your purchasing ability as a home buyer:
In 1982, the real estate market was quite slow because the interest rates were at 15% to 16%. That meant that if you bought a $300,000 home in that market at a 15% interest rate, your payment would have been a whopping $3,793 a month. Needless to say, we weren’t selling a lot of homes at that price at that time.
Today, our interest rates are hovering somewhere in the range of 3.25%. This means that same $300,000 mortgage would now only cost $1,309 a month—only slightly more expensive than renting a nice two-bedroom apartment.
To give you an idea of how this can change, let’s say these same rates climbed up to 5%. That would mean that your $1,309 monthly payment would increase to $1,610. Or, if you wanted to keep the payment exactly the same, that would mean you could only afford a house that costs $56,000 less than the one that cost $300,000.
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Today’s interest rates are fantastic.
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If you’re thinking about buying and would like to take advantage of these incredibly low interest rates and resulting payments, give us a call or shoot us an email. We look forward to working with you.
