Dear Buyer Sitting on the Fence,
I wanted to let you know that while 2010 has provided incredible opportunities with the lowest mortgage rates in history along with some of the lowest home prices in many years it appears the window of the "perfect storm" for buyers may be narrowing.
Mortgage rates have jumped nearly 1% from thier lowest levels of around 4% for 30 year fixed loans. (That is actually a 25% increase) We are fast approaching the 5% mark (and in some cases we are already there). While 5% fixed for 30 years is really a very low number it is all relative to your neighbors rate of 4% because he/she purchased two months prior. Did you know that if you were looking at a $375,000 home at 4.5% you will only be able to afford a house less than $350,000 with the same monthly payment if rates go up to 5.5%? That being said, should you decide to buy now versus waiting for another 6 months or so, your rate may very well be much better than your newer neighbor that is at 6%.
This letter is not intended to shock or scare anyone into making a decision. However, it is important to think about the fact that rates NEVER remain at all time lows forever and prices are starting to rebound so it appears that we are finally at the inflection point where they must start to go up.
Please do not hesitate to contact me with any questions about your specific situation so that when the time comes to buy, now, six months from now, or any time in the future, you are ready to make an informed decision.
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