The window is OPEN - rates are the lowest they have been ALL YEAR!

Mortgage and Lending with Silicon Valley Capital Funding

Interest rates. They are used for credit cards, checking accounts, loans of every imaginable kind, and of course - for mortgages.

When interest rates rise, they make buying a home more expensive. When interest rates drop, the cost of buying a home also drops.

What has happened in the past week is something that is very client friendly - interest rates have dropped.

Interest rates can drop on any given day, and so this creates a buying opportunity, but the window is often a short one.

What can it mean for you?

Well, the impact on a payment due to a difference in rates depends on how much the rates have changed and the loan amount. When the loan amount is higher, a drop in rates has more of an impact.

Assuming a purchase price of $400,000, with 20% down your loan amount would be $320,000. At the beginning of the year, rates were 4.625% on a 30 year fixed loan. Today, that same loan would be 4.125%. The difference in payment is $95 each month ($1645 at 4.625% and $1550 at 4.125%).

So, your buying power improved by $95 each month with the improvement in the rate - meaning you could qualify for a larger loan amount of $340,000 for essentially the same payment from the beginning of the year.

Given that competition has been very high for homes, a drop in the interest rate can allow you to offer more than originally planned without increasing your payment!

Simply stated, you can compete more effectively for a home with lower rates.


We recommend that you get your loan approval in place now and to be in ready position as a buyer, and to advise your realtor that you can be more aggressive in your pursuit of a home by offering more!


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