Mortgage Advice

A reality check perhaps?  This chart shows the trend of the 30 year fixed interest rate for the last 37 years.  Let's say it's the 1980's and you are looking for a home.  You give me a call about getting yourself pre-approved for a new home loan and I share with you how the rates are currently doing.

18% for a 30 year fixed rate?  With 20% as a down payment on a $200,000 sales price, that's a mortgage payment of $2411.34.  That's just the principal and interest payment.

Now, the current 30 year fixed rate is about 6.0%.  With a 20% down payment on a $200,000 sales price, that's a mortgage payment of $959.28!  That's a difference of 1452.08 every month!

Here an even better way to look at it.  Let's assume the first mortgage payment of $2411.34 was affordable for you.  That same payment with today's interest rates will buy you a home in the price range of $500,000!  Yes, that's half a million dollar home!

Now, perhaps a half a million dollar home is too much, (it would be too much for me at the moment) but you can see how today's mortgage rates are still at a historical low.