So I got an email today stating that
Mortgage Interest Rates had Dropped below 3.5%
Is that a "Big Deal" ?
Most people focus more on the Price of a Home.
But the amount of the payment is determined using both Price and Interest Rate.
So if you purchased a $400,000 house and had an Interest Rate of 5.5%
The Monthly Payment and Interest would be $2,271
Now with Interest Rates at 3.5%
The Monthly Payment and Interest would be $1,796
A Savings of $475 per month.
A different way to look at it is,
If you can afford a monthly payment of $ 2,000
and Rates are now at 3.5%
You can afford to buy a $ 450,000 home.
Where as... If you can afford a monthly payment of $ 2,000
and Rates are at 5.5%
You can only afford to buy a $ 355,000 home.
That's $95,000 more in Home Value for the same Payment.
Many people believe that since prices have gone up over that past few years,
that they would have to settle for less of a house.
The Reality is that the same Monthly Payment can now buy you More...
So Yeah... It's a "Big Deal"
Below is an Interactive Mortgage Calculator you can use to find a rough estimate
of what your payment could be with a 3.5% Interest Rate.
Powered By www.MortgageCalculator.net
