So every Saturday my friends over at United Mortgage send out an e-mail telling us the current interest rates. Useful information indeed, but only if you stop and think about what the numbers mean. This weeks 30 year FHA rate is 3.375%. Historically these are very low rates and may or may not stay down here. We do not know where the rates are going, but we do know there is very little room for further decline.
Plugging that number into my loan calculator I see that a $150,000 house would have a monthly payment of $663. If the rate were to climb by half a point to 3.875% the payment would be $705 an increase of $42 per month. A rate of 4.375% just 1 percent higher would make the payment $749. Small changes in interest rates translate into real money coming out of your pocket every month.
There are other costs that come with owning a house such as taxes, insurance, maintenance and utilties. All things that must be considered when deciding on your home budget. I would never recommend completely maxing out your home budget, but as you can see interest rates have a huge impact on that budget.
If you have been thinking about buying the timing has never been better. Don't wait until spring, rates may rise. Let's get you into a new house. Whether upgrading or buying your first home, let me help you find it. Give Kevin Flinn a call at 816-665-4175.