Smart Finances = Timely Action

Interest Rates Drive Market…Are You in Driver’s Seat? 

Time to talk interest rates…Again!!!

With the frequent mention of the stablized but not accelerating Real Estate sales nationwide, so much misinformation or at least misinterpretation of the “true nature of today’s market” is too common.

The facts are very simple in most markets:

     Home prices are steady to rising slowly

     Short Sales and Foreclosure are still a meaningful 
         part of the market

    Banks will be required to reply to buyer contracts on Short Sales 
         and Foreclosures in under 30 days beginning July 1, 2012

    Qualified buyers are getting mortgages…just extra paperwork            
         required

    Interest rates are the lowest in history…last week’s average
         30 year mortgage    3.75%
         15 year mortgage    2.25%

All these factors should motivate individuals and families needing a new place and investors looking to get in while the getting is good to “jump in” while the water is great.

Take interest rate benefit:

    The difference in Principal and Interest payment between 3.75% 
      mortgage(today) and a historical ‘good’ of 7% mortgage is as 
      follows:

                                        3.75%               7%          Monthly
      Mortgage                Payment          Payment     Savings

    $100,000                    $463                $665           $202 
   
    $200,000                    $926             $1330            $404

    $300,000                  $1347             $1996            $649

    $400,000                  $1796             $2661            $935

  To realize the real value of these rates, simply note that
  a buyer can buy a home with $400,000 mortgage for $200 per
  month less than Principal and Interest Payment on a $300,000
  mortgage at 7%.

  Now that is saving big dollars by striking when the fire is hot!!!

   And is it ever HOT!!!