Mortgage Update

Posted by Thomas Jackson on Friday, December 12th, 2008 at 12:24pm.

Rates are down to 4.875%*

What does that mean for buyers?

It means that the cost of buying a house just went down! Or, it means that a buyer can afford more of a house for the same monthly payment. I don't usually do math problems in these Mortgage Updates, but this situation screams for an example using real numbers. If a buyer was buying a house and getting a 30 year mortgage for $200,000 at 6.5%, the monthly payment would be $1,264.14. At a rate of 4.875%, that same $200,000 mortgage would now have a monthly payment of $1,058.42. That is over $200.00 a month less per month for the same loan amount! Another way of looking at it is that a buyer can afford more of a house for his or her money now that rates are lower. Let's pretend that a buyer wants to keep his or her monthly payment around $1,500. If rates were 6.5%, then the maximum mortgage amount would be $238,000 with a payment of $1,504.32 per month. At 4.875% interest rate, the buyer could get a mortgage of $285,000 for $1,508.24 a month. This means that a buyer can get $47,000 more money for the same payment!

Rates like this make now a great time to buy!

Call Liz Moeller and Greg Eckert Experience matters! 800-972-7759 312 Wall Street, Kingston, NY 12401Registered mortgage broker, NYS banking Dept. Loans arranged through third party providers

*APR 5.024% based on a $200,000 loan amount and 1 point. Rate assumes credit score of 740+ and a 20% down payment. Rates as of 12/11/2008. Rates and points are subject to change at any time without prior notice. Centennial Mortgage is a registered mortgage broker NYS Banking Dept. Loans arranged through third party providers.

1 Response to "Mortgage Update"

Jayson wrote:
The interest rates are definitely incredible now - I don't think many buyers realize the difference interest rates make until they see the numbers (like above). All we need to do now is stabilize those home prices ;)

Posted on Sunday, December 28th, 2008 at 1:39pm.


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