Well to those in the industry it was only a matter of time till that one of the greatest incentives to buy right now is slipping away. That's right, Low Interest Rates! Unfortunately we are seeing interest rates on the rise again and where they will stop is anyoneguess. I have had many lenders inform me they would not be surprised if rates were above 7% to 8% this time next year.
Now if you do not know the golden rule, here you go. It is the 1 to 10 ratio.This means for every 1 point interest rates go up, you lose 10% of buying power.
Example- Lets say you were qualified to buy a $150,000 house right now at 6% interest. If and when rates go up, say to 7%, you will only qualify for a $135,000 at the same payment as the $150,000 house. (Bummer isn't it!)
So if you are a Real Estate professional reading this blog, this is a great way to motivate potential clients or those who are SITTING ON THE FENCE.
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