I recently started working with a buyer who, after renting for a while, is looking into purchasing a home for himself and his kids.
During one of our conversations, the issue of financing and the importance of getting pre-approved came up. I "reminded" him that this is a great time to buy because rates are around 4.25%. His response?? "You're kidding!!! Are you serious?!?"
Oops. I assumed everyone knew that mortgage rates are as low as they are. What a lesson I learned! Note to self -- just because I'm wrapped up in the world of real estate and short sales and interest rates and foreclosures and inspections every day, doesn't mean the average consumer is.
So in case you hadn't heard -- RATES ARE GREAT!
What does that mean for you if you're thinking about buying?
It means that if you were looking at a $200,000 mortgage, your monthly payment would be approximately $984. That's based on a 30-year fixed loan at 4.25% interest. (Note that this does not include taxes and insurance.)
For a long time, we saw interest rates in the 6% range, and everyone thought that was great -- which it was! But your monthly payment (principal and interest) would be about $1200 based on a 6% interest rate -- $200+ more than what you'd be paying now. Spread that over 30 years -- that's $72,000 more that you'd be paying.
Have I got your attention? Then go talk with your lender and see what financing options are available for you. Take advantage of these jaw-dropping rates.
It really is a great time to buy. Really!
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