Its not all about Price remember the effect of interest rate

By
Real Estate Agent with The Monaghan Group DRE #BR526609000

Even though the current market has caused Interest rates to decrease in the last week, the rate is still higher than it was the beginning of 2008!

            January 24, 2008:  5.48%

            October 13, 2008:  5.94%

 

Let's look at the effect of interest rate hikes and home price declines and how they might affect your finances.

 20% down SP 218,900 Interest Rate 5.94% Payment $1043

Prices drop by 5% interest rates increase by .05%
20% down SP $207,955 Interest rate 6.44% Payment $1,045

Prices decrease by 10% interest rates rise 1%
20% down SP $197,010 Interest Rate 6.94%  Payment $1,042.

I have used this wen talking about buyers to educate them on looking at the total package not just price

 

Posted by

homes in Phoenix Arizona

To search for homes please visit my web site www.themonaghangroup.com

 

 

For all your Real estate needs, We specialize in Residential resales and have a full buyers team.

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Comments (5)

Bill Parecki
Elite Pacific Properties - Hilo, HI
RS, ABR, RDCPro, SFR, E-Pro, SRS, AHWD, Green

Aloha Andrew,

You are right on the mark. Now what we need to see is the mortgage rates going down to stimulate more sales

Oct 11, 2008 11:13 AM
Freddy A. Saavedra
Essential Properties - Goodyear, AZ

Price is a huge psychologcal issue for many clients, I have used similar tools to show my clients the total picture, but, sometimes, even to them price is king.

Oct 13, 2008 06:07 PM
Todd Bookspan, MBA
HomeStreet - Scottsdale, AZ
Senior Mortgage Consultant

Andrew - I read that the NAR asked the Govt. - in a "formal letter" - to start buying mortgage bonds to help drive rates lower. There is no doubt that lower rates equals more buying power. I think more importantly it gives a psychological boost to home buyers.

Oct 20, 2008 03:39 PM
B.G. Davison
EquityLock Financial - Phoenix, AZ

Protection helps as well.  So many are worried that when they buy now, they are going to be upside down tomorrow.  Our program seems to be easing some of that hesitation that buyers are facing today. With rates dipping currently, along with the availability of protection from property declines, there is no reason not to buy!  Great post Andrew!

May 20, 2009 06:00 AM
Jeramy Williams
AmeriFirst Financial Inc., Scottsdale, AZ Home Loans - Scottsdale, AZ

Being a numbers guy I love seeing stuff like that. The light bulb just goes off. It just goes to show that it's all relative and that there is a lot that goes into the whole picture. Thanks for sharing that and I hope you are finding success when working with your clients along those lines. I've spoken with some of your team members here recently and hope that you guys continue to do well. Take care.

Oct 02, 2009 07:33 AM