The News Reports say that this is a great time to buy a house. Home prices in NC, for the most part, are stabilizing at really low prices… and mortgage rates keep getting lower! How low with mortgage rates go? No one really knows. My personal opinion is that when Gas Prices hit $4 earlier this year, consumers and small time employers cut jobs. That’s why the May jobs numbers looked so weak. Now that gas is continuing to go lower – we will likely see the August and September jobs numbers pick back up.
GOOD NEWS in the Economy, generally means HIGHER interest rates. So, if the idea of buying a house NOW – when mortgage interest rates for 30 year fixed rate government backed mortgages are hovering at or below 4% sounds like something you might be interested in… then let’s see what kind of house you might be able to buy now!
How do lower mortgage rates equate to what kind of house you can afford? This is a beautiful “used” home in Garner, NC… The sales price is $249,900. To keep things easy – let’s assume you are putting 5% down on this property. At a 5.75% (5.98 APR) mortgage interest rate, the principal and interest payment would be $1385. This same lovely house, with mortgage interest rates at 3.75% (4.1 APR) would have a principal and interest payment of $1099!
A difference – just because historically low rates are even lower – of almost $290 a MONTH!
The home to the left of this picture is a custom built, new home on over 2 acres with an unfinished 3rd floor! At a “normal” interest rate of 5.75% (5.98 APR) the principal and interest payment (assuming you put 5% down) is $2022. The principal and interest payment at 3.75% (4.1 APR) is $1604!
Looking at it from the “other” perspective – let’s say you wanted to keep your mortgage payments at $1500 a month (without taxes and insurance). With current mortgage payments, you could have a mortgage of about $323,900! That’s a pretty nice house!
Don’t want to buy a house, and then have to eat Peanut Butter every day because you are “house poor?” Then don’t wait for rates to go higher! Buy Now! The question was, “Does a 3.75% mortgage mean you can buy a bigger house?” Yes, my friend, yes it does!
Need some First Time Homebuyer Program questions answered? Leave a comment!
Call Steve and Eleanor Thorne, NC Mortgage Experts, 919 649 5058. We help people every month who are ready to make their Dreams Come True! PLUS… we have today’s lowest mortgage interest rates! Mortgage Rates change daily – sometimes more than 2 or 3 times a day, so don’t wait! Call NOW 919 649 5058