Recently one of the lenders I work with wrote this email, to demonstrate to buyers why waiting to purchase while interest rates rise is not a good idea.
"With the recent little run up in rates, I thought I would make an easy way to convince undecided buyers to act now, instead of waiting for the prices to drop. Unfortunately rates are up about .375 in the last couple weeks, which is already eroding buying power. Waiting to buy when rates go up is expen$ive.
Examples
With a $200,000 loan, the payment at 4.00% was $954 (excluding taxes & insurance).
If the payment were to stay the same, but at a higher rate, the amount borrowed would go down, which effectively lowers total buying power! (prin & int = principal and interest)
A $954 prin & Int payment at 4.00% 30 yr fixed rate = a $200,000 loan
A $954 prin & Int payment at 4.25% 30 yr fixed rate = a $194,000 loan
A $954 prin & Int payment at 4.50% 30 yr fixed rate = a $188,400 loan
A $954 prin & Int payment at 4.75% 30 yr fixed rate = a $183,000 loan
A $954 prin & Int payment at 5.00% 30 yr fixed rate = a $177,800 loan
Basically, every .25% rise in interest rates costs about $6.000 in buying power."
If you are ready to look at homes with our high inventory, low rates, and movtivated sellers, call or email me and let's talk about your options.
(Above courtesy of Frank Mancino, Vice President, Gateway Funding, 3564 Quakerbridge Rd, Hamilton, NJ 08619, 609-586-0020, 877-853-3562 toll free.)
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