Great Time to Buy!

Believe it or not, now is a great time to purchase a home because mortgage rates are on the rise. Did you know that mortgage rates have surged to the highest in eight months? A standard 30-year fixed loan is now at 5.21%; up from 5.08%. Rates dropped to a record low 4.71% in December, pushed down by a Federal Reserve campaign to reduce borrowing costs for consumers. But now they’re increasing quickly (according to MSNBC.com, 4/8/10 www.msnbc.msn.com/id/7148582/).

What does this mean to you?

First, if the interest rate goes up just a ¼% from today’s rate, by the time you buy, your mortgage payment will increase by around $15/month for every $100,000 you’ve mortgaged. (For example, a $400,000 mortgage will have an increased payment of $60/month.)

And say you are waiting on the price of a property to reduce another $10,000. Because average and median sale prices are currently up, if you put down 20% and mortgage 80%, that $10,000 price reduction only saves you about $44/month. So if you wait too long to negotiate that last $10,000, it may cost you $60/month to save $44/month. That just doesn’t make sense.

NOW is the prime time to buy, before rates rise again!

 

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