Right now is one of the best times ever to purchase a Spring Texas home because apartment rentals are projected to increase, our local Spring Texas housing market remains affordable, consumer confidence is increasing, mortgage interest rates are hovering around 5%, and if you are going to be a first time homebuyer there is an additional incentive of a $8,000 tax credit.
Over the last couple of weeks, we have seen the absurdly and historically low 30 year fixed interest rates of 4.5% disappear as the interest rate has crept into the low 5%. But don’t count on even the 5% interest rates being available for long as even President Obama has issued a warning stating the “interest rates are unsustainable”.
You hear the mortgage interest rates talked about a lot these days but how much does the interest rate really impact your monthly payment. Based upon the example below a rise in the interest rate from 5% to 6% increases your monthly payment by $94 a month which is not a budget buster.
There is more to analyze than just the increase in your monthly mortgage payment. The big number is the impact the additional 1% interest has on the amount of interest you will pay over the term of the loan which is $33,873. Sure, the number is not going to be as large if you are planning on selling your Spring Texas home before the end of its 30 year mortgage.
Let’s look at the impact a 1% higher mortgage interest rate has one more way. The monthly payment on a loan amount of $150,000 at 6% is $899. The monthly payment on a loan amount of $167,500 at 5% is the same $899. A 1% lower interest rate provides you with $17,500 more purchasing power.
Interest rates this low may never happen again and could truly be a once in a life time opportunity. Lock in your interest rate as soon as you can.
Reminder: A mortgage lender can not lock in an interest rate until you have provided them with the address of the Spring Texas home you are purchasing.
We entrusted Jill Wente with the sale of our current home and purchase of a new home. From the beginning... read moreWe entrusted Jill Wente with the sale of our current home and purchase of a new home. From the beginning she was extremely up front and honest about exactly what we would need to do to get our house sold. We had an incredibly tight timeline, that she explained would be difficult to make - but she helped us make it happen and our house sold in 2 days! She had recommendations for all our home repair needs and they were all professional and fairly priced. She worked hard to really sell our offer for our new home - she was able to pull off the tight timeline, securing a rent back from our old house so we had time to move out, and a contingency for our new home. Definitely exceeded our expectations. She was so helpful along the way - as first time home sellers we really relied on her and we feel lucky to have worked with her! You will not regret working with Jill! read less