Monday, June 16, 2008

Buyer Beware

Buyers beware... interest rates are going up. Two weeks ago we saw rates under 6% and this week rates are around 6.5%.

If you are on the fence on whether you should buy now or later, keep this in mind... a $200,000 house at 6% fixed over 30 years would be a payment of $1,199.10 P&I, the same house at 7% interest would have a P&I payment of $1,330.60. That's a difference of $131.50 per month.

Another way to look at it is... if you want to keep your P&I payment around $1,200 each month you can afford a $200,000 house at 6% but only a $180,000 house at 7% interest.

Please don't wait. Interest rates are still very good and there are a lot of homes to choose from on the market right now.

Brandi Nelson - The Hill-Nelson Real Estate Team
Century 21 Signature Real Estate, Ames, Iowa
Each office independently owned & operated.
515-291-0914 (cell phone)


Tyler said...
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Tyler said...

I agree Brandi. Your buying power is severely impacting with the cost of money. As I type this (June 22nd, 2008), the Fed will be meeting this week and making their announcement on Wednesday. It will be interesting to see what they have to say about inflation.

It may sound counterintuitive, but if the Fed decides to hike interest rates - mortgage rates will most likely come back down (because it will show they're working against inflation).

If buyers are 'on the fence', the next couple of months should open some huge buying opportunities to lock in a stellar rate (even though 7% isn't horrible)!

Great Post Brandi!


Tyler Osby, The Wealth Creation Guy