BUYER ALERT: These Affordable Mortgage Rates Are Not Going To Last
Are you sitting on the fence about a possible move? Would you like a larger/smaller/different home but have been sitting on the sidelines until things settle out?
If you answered yes to either question, perhaps you need to jump down off the fence and pick out a home that really meets your needs.
Home values may be almost inconsequential if you plan to purchase using borrowed money. I predict interest rates are going to dramatically change the affordability of housing
Lets take a look at a typical $300,000 home in my neighborhood.
1. Assume you are putting down $60,000 as a down payment (20% of purchase price)
2. Assume you need an 80 % loan to value. Your loan amount will be $240,000
3. Assume you are getting a 39 year amortized loan (360 monthly payments).
4. I am going to assume you could get a 4.6 % interest rate today on this loan.
5. Lets assume you will have to pay a 10 % interest rate if you wait and purchase a home in 2012
6. You can use the MORTGAGE CALCULATORon the englishteam.com website if you want to change my assumptions!!!
Monthly Payment if you buy now: $1,468
Monthly Payment if you wait to buy in 2012: $2,344
MONTHLY DIFFERENCE: $876
DIFFERENCE OVER LIFE OF LOAN: $315,360
If mortgage interest rates increase to double digits, as many economists presently predict, then that $300,000 house will cost a borrower an additional $315,360 if you wait and buy in 2012.
BUYER ALERT: Buy that dream home now while you can still afford it!!!!