Buyers….Get Off That Fence!

October 4th, 2009
Written by Suellyn Godino
Categories: Buyers Only

WHY buyers need to get off the fence! Rates will go up early next year.

Currently the Federal Reserve is buying mortgage backed securities which helps to keep rates artificially low. This program is schedule to end in late December. A new Federal Reserve statement was released on Sept 23 and they have decided to stretch out their buying into the first QTR of 2010 without adding any additional money to their program. This by design will gradually increase rates by about 1% to just over 6% in the first part of next year.

The best rates that we have seen in 30 years can be had along with the best selection, now is time to get off the fence. Do you want to look back and find you missed this opportunity? Looking back now at the bottom of the stock market in March the gains for the S&P 500 are 50% for the year.

Here is how a rate change of 1% will affect your payment:

For each $100,000 in loan amount with a 5% interest rate (30 yr fixed) the payment is $537 and at a 6% rate the payment is $600 (principal and interest). This is a 11.7% increase in your payment that will happen over a period of one month.

Loan Amount	Payment at 5% (30 yr fixed)	Payment at 6% (30 yr fixed)	Monthly Difference
$300,000	$1,611	$1,799	$188
$400,000	$2,147	$2,398	$251
$500,000	$2,684	$2,998	$314
$600,000	$3,221	$3,597	$376
$700,000	$3,758	$4,197	$439
$800,000	$4,295	$4,796	$501
$900,000	$4,831	$5,396	$565

Allow me to help you find the most for your money before the rates increase.

This entry was posted on Sunday, October 4th, 2009 at 10:44 am and is filed under Buyers Only. You can leave a response, or trackback from your own site.