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Interest Rates -- Why You Should Care

By
Real Estate Agent with RE/MAX Results

Mortgage Interest RatesInterest rates are unbelievably low right now and that is great news for home buyers. Last week the federal government took actions meant to lower consumer interest rates on bank loans.  So far, it looks as if the steps taken are working and working well as bank lending rates fluctuate between 4.375% and 4.75% for a 30 year fixed loan.

These low interest rates, combined with low housing prices, are creating fantastic opportunities for home buyers right now. 

For example, just last fall (2008) when interest rates were at 6.5%, a Rochester home was offered on the market at $234,900.  The same home came on the market this spring with interest rates at 4.75% with a home price of $219,900.  Your mortgage comparison would look roughly like this:

List Price

10% Down Payment Loan Amount Payment at 6.5% Interest Payment at 4.75% Interest
$234,900 $23,490 $211,410 $1336

 

$219,900 $21,990 $197,910

 

$1032

If you purchase the home at the $219,900 price with the 4.75% 30 year fixed mortgage rate, you would save:

Savings on Down Payment: $1,500
Savings on Monthly Payment: $304
Savings on List Price: $15,000
Savings on Interest Paid over the 30 year life of the loan: $95,891

The savings are significant and home buyers are responding.  In the Rochester, MN real estate market we saw a significant increase in sales last week and fantastic buyer traffic at the Edina Realty open houses.

Economists tell us that home buying opportunities like this come around once every 70 years or so.  Interest rates are expected to sneak upward over the months so now don't wait

Visit www.DavidAndLoisMarris.com to search for homes, open houses and more.  We can set up an automated search so you will be quickly notified when a home matching your criteria comes available. Just email or call today: DavidMarris@EdinaRealty.com, LoisMarris@EdinaRealty.com, 507-398-3251.

 

Real Estate Agents David and Lois Marris are top producing REALTORs at Edina Realty of Rochester, MN.

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Lois Marris is a real estate agent at RE/MAX Results, and licensed in the state of Minnesota.

 

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