How Historically Low Interest Rates Increase Your Purchasing Power

low interest ratesI know I am always talking about interest rates and how historically low they are at the moment but I want all my customers and friends to take advantage of the amazing interest rates available right now.  Take a look at the chart below.  When interest rates are low as they are now you can buy much more house for your money.  AND these rates will be fixed for 30 years so you don’t have to worry about your mortgage payment going up!  Don’t wait call me today and let’s get started on a home of your own before both prices and interest rates go up!

Courtesy of Keeping Current Matters October 2016

According to Freddie Mac’s latest Primary Mortgage Market Survey, interest rates for a 30-year fixed rate mortgage are currently at 3.47%. Rates have remained at or below 3.5% each of the last 16 weeks, marking a historic low.

The interest rate you secure when buying a home not only greatly impacts your monthly housing costs, but also impacts your purchasing power.refiancing 3

Purchasing power, simply put, is the amount of home you can afford buy for the budget you have available to spend. As rates increase, the price of the house you can afford will decrease if you plan to stay within a certain monthly housing budget.

The chart below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments at or about $1,100 a month.

How Historically Low Interest Rates Increase Your Purchasing Power | MyKCM

With each quarter of a percent increase in interest rate, the value of the home you can afford decreases by 2.5%, (in this example, $6,250). Experts predict that mortgage rates will be closer to 4% by this time next year.

Act now to get the most house for your hard earned money.

Remember it is always toasty in Naples and you deserve your piece of Naples sunshine and a mortgage with low interest rates.  Call me today so you can start working with a mortgage broker and get qualified.

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