Mortgage Update
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.
December 28th, 2008 at 1:39 pm
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