Throughout most of this crazy year we call 2020 mortgage rates have been very low, not the lowest ever, but very, very low. Well now they are the LOWEST EVER. For buyers you just got an effective raise with regards to your home buying power. I have mentioned this in previous posts over the years but a 1/2 point difference in mortgage interest rate can add up to a tremendous amount of buying power.
A $300k mortgage at 3.5% will have a principle and interest payment of $1347 per month. That same loan at 3.0% has a PI payment of just $1265. A buyer is qualified based mostly on the amount of the payment relative to income and other payments. At 3.0% interest that $1347 payment gets a loan of $319,500. That is nearly $20,000 MORE buying power. It's like you just got a big fat raise from your boss.
I have many buyers that are looking about, and now is the time to pull the trigger on these crazy low rates. I have seen well qualified borrowers getting rates on 30 year fixed mortgages in the middle twos!
Buyer's this is your moment. Go out and lock down that dream house with a historic low mortgage.
Musings on the state of the market with tips, information and a little fun.
Showing posts with label low rates. Show all posts
Showing posts with label low rates. Show all posts
Friday, July 24, 2020
Friday, June 21, 2019
Interest rates favorable!
Recent market conditions have managed to push rates back down again to two year lows. Buyers should be cautious when looking at online rates as they often reflect a national average and regional rates vary considerably. The Pacific Northwest region is generally higher than the national average by as much as a quarter point. That said, rates are at two year lows right now and that means buyers have just gained some purchasing power.
With rates nearly a full point lower than this time last year, a buyer that qualified for $300,000 last year can probably get closer to $340,000 this year! Housing prices have NOT gone up that much over the last year so this is a huge positive for buyers.
Just to be clear, if a buyer was quoted a 5% rate last year and qualified to buy a $300,000 house. That same buyer will qualify for a $337,000 house at 4%. Year over year that $300,000 house last year would sell for maybe $310,000 today in our local market. Home affordability is better this year than last year due to the rate value exceeding the appreciation value.
All buyers that were frustrated with conditions in the last couple of years ought to get back in the game before the market reacts to the lower rates and prices start heading up again. For now, prices are stable, inventory is decent and rates are low. This is a window of opportunity that may close soon.
With rates nearly a full point lower than this time last year, a buyer that qualified for $300,000 last year can probably get closer to $340,000 this year! Housing prices have NOT gone up that much over the last year so this is a huge positive for buyers.
Just to be clear, if a buyer was quoted a 5% rate last year and qualified to buy a $300,000 house. That same buyer will qualify for a $337,000 house at 4%. Year over year that $300,000 house last year would sell for maybe $310,000 today in our local market. Home affordability is better this year than last year due to the rate value exceeding the appreciation value.
All buyers that were frustrated with conditions in the last couple of years ought to get back in the game before the market reacts to the lower rates and prices start heading up again. For now, prices are stable, inventory is decent and rates are low. This is a window of opportunity that may close soon.
Friday, August 12, 2016
Enjoy This Blast from the Past!
Rates continue to remain super low. We have been talking about a low rate bubble for quite some time and it looks like things will stay the same until at least early next year when a new presidential administration will take over.
Originally posted October 16th, 2015, by Rod Sager
Holy Rate Basement Batman! Banks are Practically Giving Money Away!
Have you looked at the mortgage rates lately? Most lenders are offering qualified borrowers a 30 year fixed rate loan at around 3.5% These may not be the lowest rates ever but if not, they are very close to the lowest ever. I have discussed the notion that interest rate is far more important than purchase price especially if one intends to stay in the property for a long term period of seven or more years. Imagine borrowing $240,000 from the bank at 4.5% over 30 years fixed. By all measures this is a good loan at a great rate. The principle and interest payment (PI) would be $1,216 per month. But right now you may very well find lenders offering 3.5% 30 year fixed loans. Now the $240,000 mortgage payment looks more like $1,078. That is a whopping $138 per month less! That is a savings of $16,560 over ten years and nearly 50 grand over the life of the loan! In the heavily paraphrased words of the immortal Doctor McCoy, my God man, why aren't you buying a house!
Seriously my friends, these are truly fabulous times. Sellers will get the strongest offers when rates are low because more buyers will qualify at the higher price. Buyers will get the most bang for their buck at 3.5%. Buyers can also qualify for a lot more money. The same buyer that qualifies to borrow $240,000 at 4.5% will qualify to borrow $270,500 at 3.5%. These super low rates will allow buyers to essentially get 12.5% more money for the same monthly payment. 4.5% is a great rate, 3.5% is a OMG rate! Be sure to check with your favorite mortgage professional as there are a few variables that banks look at such property taxes, mortgage insurance, etc. But in general these are pretty accurate figures.
Yes prices have crept up and many entry level buyers have found themselves in a pickle. But there is a window of opportunity to effectively take 12.5% off the price of a house. Seller wins, buyer wins, everybody wins, except the bank. That my friends is a good scenario. Happy hunting!
Originally posted October 16th, 2015, by Rod Sager
Holy Rate Basement Batman! Banks are Practically Giving Money Away!
Have you looked at the mortgage rates lately? Most lenders are offering qualified borrowers a 30 year fixed rate loan at around 3.5% These may not be the lowest rates ever but if not, they are very close to the lowest ever. I have discussed the notion that interest rate is far more important than purchase price especially if one intends to stay in the property for a long term period of seven or more years. Imagine borrowing $240,000 from the bank at 4.5% over 30 years fixed. By all measures this is a good loan at a great rate. The principle and interest payment (PI) would be $1,216 per month. But right now you may very well find lenders offering 3.5% 30 year fixed loans. Now the $240,000 mortgage payment looks more like $1,078. That is a whopping $138 per month less! That is a savings of $16,560 over ten years and nearly 50 grand over the life of the loan! In the heavily paraphrased words of the immortal Doctor McCoy, my God man, why aren't you buying a house!
Seriously my friends, these are truly fabulous times. Sellers will get the strongest offers when rates are low because more buyers will qualify at the higher price. Buyers will get the most bang for their buck at 3.5%. Buyers can also qualify for a lot more money. The same buyer that qualifies to borrow $240,000 at 4.5% will qualify to borrow $270,500 at 3.5%. These super low rates will allow buyers to essentially get 12.5% more money for the same monthly payment. 4.5% is a great rate, 3.5% is a OMG rate! Be sure to check with your favorite mortgage professional as there are a few variables that banks look at such property taxes, mortgage insurance, etc. But in general these are pretty accurate figures.
Yes prices have crept up and many entry level buyers have found themselves in a pickle. But there is a window of opportunity to effectively take 12.5% off the price of a house. Seller wins, buyer wins, everybody wins, except the bank. That my friends is a good scenario. Happy hunting!
Friday, October 16, 2015
Holy Rate Basement Batman! Banks are Practically Giving Money Away
Have you looked at the mortgage rates lately? Most lenders are offering qualified borrowers a 30 year fixed rate loan at around 3.5% These may not be the lowest rates ever but if not, they are very close to the lowest ever. I have discussed the notion that interest rate is far more important than purchase price especially if one intends to stay in the property for a long term period of seven or more years. Imagine borrowing $240,000 from the bank at 4.5% over 30 years fixed. By all measures this is a good loan at a great rate. The principle and interest payment (PI) would be $1,216 per month. But right now you may very well find lenders offering 3.5% 30 year fixed loans. Now the $240,000 mortgage payment looks more like $1,078. That is a whopping $138 per month less! That is a savings of $16,560 over ten years and nearly 50 grand over the life of the loan! In the heavily paraphrased words of the immortal Doctor McCoy, my God man, why aren't you buying a house!
Seriously my friends, these are truly fabulous times. Sellers will get the strongest offers when rates are low because more buyers will qualify at the higher price. Buyers will get the most bang for their buck at 3.5%. Buyers can also qualify for a lot more money. The same buyer that qualifies to borrow $240,000 at 4.5% will qualify to borrow $270,500 at 3.5%. These super low rates will allow buyers to essentially get 12.5% more money for the same monthly payment. 4.5% is a great rate, 3.5% is a OMG rate! Be sure to check with your favorite mortgage professional as there are a few variables that banks look at such property taxes, mortgage insurance, etc. But in general these are pretty accurate figures.
Yes prices have crept up and many entry level buyers have found themselves in a pickle. But there is a window of opportunity to effectively take 12.5% off the price of a house. Seller wins, buyer wins, everybody wins, except the bank. That my friends is a good scenario. Happy hunting!
Seriously my friends, these are truly fabulous times. Sellers will get the strongest offers when rates are low because more buyers will qualify at the higher price. Buyers will get the most bang for their buck at 3.5%. Buyers can also qualify for a lot more money. The same buyer that qualifies to borrow $240,000 at 4.5% will qualify to borrow $270,500 at 3.5%. These super low rates will allow buyers to essentially get 12.5% more money for the same monthly payment. 4.5% is a great rate, 3.5% is a OMG rate! Be sure to check with your favorite mortgage professional as there are a few variables that banks look at such property taxes, mortgage insurance, etc. But in general these are pretty accurate figures.
Yes prices have crept up and many entry level buyers have found themselves in a pickle. But there is a window of opportunity to effectively take 12.5% off the price of a house. Seller wins, buyer wins, everybody wins, except the bank. That my friends is a good scenario. Happy hunting!
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