It’s amazing how the $8000.00 tax credit got people moving and off the fence this past year. The National Association of Realtors did a great job of getting the $8000 credit message out…and first time homebuyer’s took note – as they made up Half of all purchases last year. The National Association of Mortgage Brokers, on the other hand, has failed miserably (in my humble opinion) of making people aware of just how good rates are right now, and how that affects a home buyer’s bottom line.
For example, a $250,000 loan at 5% (roughly today’s rates) would yield a monthly payment of around $1340. If rates go up to the mid 6’s, as some experts suggest they might by this time next year – the same loan would yield a payment of around $1580…around a $240/month difference.
I know it’s not as sexy as an $8000 lump sum…but it equates to an $8,000 savings in less than 3 years. The cool thing is…it’s an $8000 savings for the following 3 years as well…and then the 3 years after that too. In fact…by the time you’re done paying your loan off…it’s an $86,400 savings! That IS a big deal…and the low mortgage rates are something often overlooked by inexperienced buyer’s who are waiting for the “bottom”.
Take note – – these rates hovering around 5% will not be around forever!
Filed under: Market Updates |