What Are Interest Rates

Real Estate Agent with Green Realty Group (808) 388-1485 RS - 53215

According to Wikipedia "An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. "

Basically, if I lend you money and I want to make money lending you money then I will charge you a fee which is otherwise known as Interest. Based on the time period we allow you to pay for the use of the money I lent you and how much I charge you the Interest Rate is calculated.

Bottom line all you truly need to understand is the lower the interest rate the less money you are being charged to use the money. The higher the interest rate the more money you are paying to use the money.

Which leads to the lower the interest rate the more money you can borrow. That is why this market is so wonderful for those with decent credit and some money saved for closing costs and or a small down payment.

To go further, for one point of interest increase you loose approximately $50,000 in buying power. HUH? I know it is a little confusing let me give you an example. For example, if you can qualify for a $350,000 home at 4% interest and then the rate increases to 5% you would only be able to qualify for a $300,000 home.

This is why we say while interest rates are low Buy if you can. Once they start to increase you loose buying power.

In today's real estate market Buyers are experiencing not only low interest rates but low list prices. This is the time to Buy. Contact a loan officer today to find out what you can qualify for it only takes 20 minutes over the phone to find out. Here are a few people who know what they are doing and can answer any questions you may have in regards to financing:

Alan Fentriss, SVP Loan Manager
Crystal Acohido, SVP Loan Manager

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Warm Regards-

Mike and Gayle


Mike Ramsey Fujita (S) RA SFR, MRP

(808) 630-1828

Gayle Fujita Ramsey (S) RA SFR ePRo

(808) 388-1485


Green Realty Group



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