22 Oct Now That’s Just Crazy…
Last time mortgage interest rates were as low as they are now, you could buy a gallon of gas for 19 cents! You may have heard that “interest rates are historically low” and that it’s a great time to take advantage of it by buying a home, but what does that mean? Some of you may consider it mumbo jumbo jargon, but knowing what the interest rate is and what it means to you can be extremely helpful both now and for years to come.
“Interest Rate” simply means the percentage of money you are charged in order to borrow money.
Just consider that only 5 years ago the interest rates were at 6% and now they are at a rock bottom 4%. That may not seem like a big difference but take a look at how a lower interest rate will decrease the mortgage payment for a typical newer 3bd/2ba 1200 SqFt home in Nampa for sale right now at $78K:
|
|
2005 |
Today |
| Interest Rate |
6% |
4% |
| Monthly Payment* |
$682/mo |
$564/mo |
Now, keep in mind, in 2005 there was no way you could find a nice, newer home in Nampa for $78K… now there are plenty of nice homes you can find under $100K. Ada County might be a bit higher but not by much; the same three bed two bath home in Ada County is going for under 120k!
Here are some examples of purchase prices compared to the monthly mortgage payment at 4%:
|
|
100K |
120K |
$150K |
| Monthly Payment* |
$564/mo |
$678/mo |
$847/mo |
Since interest rates are at record lows, there’s only one way for them to go and that’s up! Take advantage of these rates today by calling me anytime at 208.353.8898 with questions or more information on real estate and buying a home. I look forward to hearing from you soon!
If you are interested in playing around some more with interest rates, there is a mortgage calculator on our website in the buyers section. Just put in the price of the home and the loan amount and it will tell you how much your payment would be. Have fun!!
*Monthly Payments assume: 3.5% down on an FHA thirty year fixed loan, 4% or 6% interest rate, 1.25% property tax, 0.5% mortgage insurance and $200/yr homeowners insurance policy