What Would Happen if Interest Rates Rise to 5 Percent? And My Most Important Video Ever!
Today’s average interest rates for a 30-year fixed rate home loan is 3.91% for Los Angeles, CA, according to http://www.bankrate.com, (February 27, 2015).
What would happen to the monthly payment for a typical home purchase in Southern California if the rates rise to 5%?
According to the California Association of REALTORS®, the Median home price in January 2015 for a home in Los Angeles County was $441,610, while in Orange County it was $674,340. So, let’s use $500,000 for the price of a typical home for our calculations.
What would the monthly payment be at today’s interest rates compared to what they would be if rates rise to 5% for a loan on a typical home purchase with a 20% down payment?
The down payment of 20% would make the loan amount $400,000.
The following amounts come from the mortgage calculator at www.bankrate.com.
At today’s interest rate of 4%, the monthly payment would be $1,909.66.
If rates rise to 5%, the monthly payment would be $2,147.29
So, if a home buyer waits until the end of the year, and the rates do indeed rise to 5%, the monthly mortgage payment will be $237.63 higher.
The video below may be the most important video I have ever made. We are at a critical moment for home buyers and sellers.
Why move up now? Here are some articles I wrote in 2009 that still apply today:
Move Up Reason 2: Low Interest Rates
Move Up Reason 3: Lower Property Taxes
Move Up Reason 5: You Have Outgrown the Old House
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Thinking about selling your home? Go to http://yesiwanttosell.com.
I help home owners in the following towns in Southern California: Anaheim, Brea, Fullerton, La Habra, La Habra Heights, La Mirada, Orange, Placentia, Santa Ana, Tustin, Villa Park, Whittier and Yorba Linda.
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