Shelia A. Ferrentino, GREEN SFR's Blog
By Shelia A. Ferrentino, GREEN SFR | Agent in 14150
The Cost of Wating
Should I Buy I Buy NOW or WAIT ... Do You Know the cost of Waiting?
If rates start to rise, buyers may find them priced out of the neighborhoods they want to buy in. Below is an example of what a rising rate environment would mean to buyers who are on the fence. 5 years ago, a 30 year fixed rate averaged around 6% and ten years ago, they averaged under 8%.
Let's Look at a Proposed Purchas Price of $100,000 with a 3.5% Down Payment, base loan $96,500
Interest Rate 4.5% 5.0% 5.5% 6.0%
Monthly Pmt $489 $518 $548 $578
Monthly $29 $59 $89
Increased Cost $10,440 $21,240 $32,040
Over Term of Loan
To help you better understand what this means to your borrowing power, the same payment of $500 per month loses almost $16,000 in financing ability with a rate increase of just 1.5%
Rate 4.5% 5.0% 5.5% 6.0%
Loan Amount $102,500 $96,500 $91,500 $86,500