Low Rates+ Personal Timing = The Time to Buy is NOW

What is the perfect time to buy a home? According to a recent article by the KCM blog, the The investment cycle is represented in the chart below. With today's low interest rates, the focus is on the bottom dip in the cycle, where between despondency and depression, buyers can find their maximum mortgage loan opportunity.

In other words, if you are a homeowner and are facing mortgage payments that may be a little too high for your budget and are milling around the bottom the buying cycle, NOW is the time to talk to a loan officer about the options that exist to reduce your mortgage debt by taking advantage of the historically low mortgage interest rates available today.

KCM gives us this example:

"Let's say you were going to take out a $200,000 30-year-fixed-rate mortgage in November of 2010. At that time, interest rates were 4.17% (as per Freddie Mac). Your principle and interest payment would have come to $974.54. According to the most recent report from Case Shiller house prices fell 3.9% in the 4th quarter of 2010. The most recent report from the Federal Housing Finance Agency shows a 0.8% fall in prices.

Let's use the larger percentage decrease: 3.9%.

For the sake of keeping the math simple, we will now say you can get the same house with a $192,000 mortgage (4% discount from November price). Interest rates are now 4.95% (as per Freddie Mac).

Your principle and interest payment would now be $1,024.84.

By waiting to pay less for the PRICE of the house, the COST increased over $50 a month. That adds up to more than $600 a year and over $18,000 over the life of the loan."

Look at your mortgage goals, consider the COST of the property you want to buy or refinance and talk to a lender today to see how much money you can save over the life of your loan or how you can reduce your maonthly payments by taking advantage of the low interest rates. Connecticut homeowners and buyers, as always, can call me to talk about the plethora of options that exist to decrease your mortgage debt and potentially save your home from foreclosure.