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Home Buyers Should
take Advantage of Low Mortgage
Rates
People contemplating the
purchase of a new home will want to consider the benefits of today's
historically low mortgage rates. Although the 30-year fixed
mortgage rates have inched up a little in recent months, they are
still very low by historical standards. Rates, on average, are
almost identical to where they were in 1966 and 1993, and just about
a point higher than they were in 2005 and 2006 when mortgage rates
sank to 40-year lows. When measured against the double-digit
mortgage rates of the late 1970's and early 1980's, it's clear that
there is more room for rates to go up than down. Now is clearly the
best time to buy with the uncertainty in the mortgage market.
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For example, on a $300,000, 30-year, fixed mortgage at 6.375% the
monthly payment would be $1,872 for P&I. If a Buyer decides to sit
on the fence and rates inch up another half point, the monthly
payment increases to $1,962 or $99 more per month. A one point
increase in rate means another $201 per month or $2,412 per year.
Unfortunately, Buyer income does not move in correlation with rising
mortgage rates, therefore, the Buyer will lose purchasing power in
an increasing rate market. Worse yet, the Buyer either sits on the fence
longer to wait out a rate decrease that may never come or has to buy
a house of lesser value in the future than they could today.
Many Banks have a "Lock-n-Shop" program where
Buyer's can lock into a rate today, without a property, and take up to
4-months to close on a property. The main benefits are that the
Buyer has rate protection in a rising rate market.
The Real Estate Market in Morris County is still healthy compared to the
rest of the country due to affordable mortgage rates.
If you are thinking of buying or selling, please
call
Smitha.
Need advice on preparing your home for sale in the future? Smitha can
help you with that as well. Call Smitha today.
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Equal Housing Opportunity |
Smitha Ramchandani
Sales Associate | Weichert Realtors
73 Washington St | Morristown, NJ 07960
Mobile)
973-953-7777 | Office) 973 455-1900 Ext. 122
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Copyright Notice:
Morris-Homes.com is a registered service mark. The
information contained in this site is for general
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copied or reproduced without the express written consent
of Smitha Ramchandani. All rights reserved. © 2006.
By submitting
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