Lets take a very simple example of how mortgage interest rates affect our bottom line. In this case the buyer is purchasing a home for $500,000
and is putting 100,000 or 20%
as a down payment. The buyers loan amount is $400,000
. The interest rate is a ridiculous 3.75%
and will be amortized based on a 30 year payout
. The total principal & interest payment for the life of the 30 year loan is $1,852.46
. Simple put; for every $1,000
the buyer borrows it's only costing him/her $4.63
. WOW that's incredible.
Now let's take the same case, but increase the buyers cost to borrow the same $400,000 by just 3% making the interest rate now 6.75% instead of the 3.75%. Remember we're still amortizing the loan over the same 30 year period. The new principal & interest payment for the life of the 30 year loan is now $2,594.39 which increases the buyers monthly cost by $741.93 per month or $267,709.80 over 30 years. WOW that's even more incredible isn't it?
As professional real estate brokers/sales associates our message to all buyers should be confident, positive, uniform and clear; there is no better time to buy than right now, affordability has never been better then it is right now. The perfect real estate storm ( a major correction in declining real estate values combined with historically low interest rates) has created buying opportunities we may never see again in our life-time.
All Information Deemed Reliable But Not Guaranteed
My guest TV appearances on the Fox Business Channel:
Tim Waller on Property Tax Appeals:
Tim Waller / ColdwellBanker
1410 Valley Road., Wayne, NJ 07470
Cell: 973-865-0249 Fax: 973-387-3202
"The Best Move in Real Estate is the One That's Successful."
If you know of someone planning to sell their home, or planning to purchase a home, please invite them to call me at 973-865-0249 for a personal consultation. Thank you