Low Interest Rates + Low Prices= Perfect Steamboat Purchase

January 17th, 2010
Written by Suellyn Godino
Categories: Buyers Only, Mortgage Info

Interest Rates 1-14-2010 We know that there are a lot of people waiting for prices to go down before they purchase. Here is an example of what increasing rates do to the cost of home ownership.

Loan amount of $240,000 and a purchase price of $300,000 with 20% down

The principal and interest payment at 5% is $1,288.37.

If the rates increase to 5.5% the same payment ($1,288.37) would result in a loan amount of $226,910 or $13,000 less. With 20% down this is a purchase price of $283,635.

If the rates increase to 6% the same payment ($1,288.37) would result in a loan amount of $214,890 or $25,110 less With 20% down this is a purchase price of $268,612.

(This is a purchase price drop of 10%)

This means that you should be very careful about waiting to purchase. Even if the prices continue to drop, the interest rate increases may absorb the price benefit. Call me regarding Bank Owned and short sale properties on the market… priced to sell NOW!

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