1319 W Bullard #4 -- Fresno CA -- 93711
Read CNN's staff writer Jessica Dickler's take on today's action (or non-action) by the Fed. [Article Here] This is what caught my attention:
"So if you are in the market for a house, now could be the time to pull the trigger before rates rise even further. As Tyson points out, yields on 10-year treasury notes are still relatively low, an indication that 30-year mortgages could still be a good deal."
If you're considering purchasing a home and but you believe prices will drop another 10% over the next year you will be wise to consider as well where you think interest rates will be a year from now (unless you intend to pay cash) and here's why.
Lets say you plan to buy a home with a loan amount of $240,000 at today's rate of approx 6.25% your payment would be $1477.72
Now let's assume that next year that same home has dropped 10% in price so now you only need to finance $216,000 (10% less) but the interest rate has moved up one percentage point to 7.25% -- your payment would be $1473.50 -- or about $4.00 less.
If rates move up one and quarter percent higher to 7.5% your payment would be $1510.30 and you would be paying $33.00 MORE for $24,000 LESS money.
KEEP INTEREST RATES IN MIND WHEN CONSIDERING WHEN TO BUY A HOME.
© Randy "Lazarus" McAtee