Interest Rates & Home Affordability
There’s never been a better time in recent history than right now to buy an Orange County home thanks to historically low interest rates. Sadly though many people are still “sitting on the fence”, waiting, until the right time comes for them to buy a home and many Orange County home buyers will wait for interest rates to go up by one percent or more until they decide to make their move. What exactly will waiting until interest rates go up by one percent or more cost the average home owner during the lifetime of a 30 year loan?
Buy An Orange County Home Now?
Let’s say you’re an average Orange County home buyer and you’re interested in buying a home that costs $300,000 with a down payment of 10%. This means that you will have to get a home loan of $270,000.
At an interest rate of four percent, your monthly, principal and interest payment on a 30 year loan will be $1,289 and your total pay off amount will be $464,000.
Wait A Little Longer?
Lets assume you’re going to wait a little while and you don’t get a home loan until interest rates reach five percent. What does this mean for you? At an interest rate of five percent, your monthly payment including principal and interest on a 30 year home loan will be $1,449 per month. That’s an increase of $160 more per month than the monthly payment you would have with a 30-year home loan at a four percent interest rate.
With an interest rate that’s just one percent higher your total pay off amount on a $270,000, 30 year loan with a five percent interest rate will be $521,000; that’s an additional $57,600 over a 30-year period. Wouldn’t you rather invest that $57,000 elsewhere (like your retirement) instead of giving that money to the bank?
If you’re ready to buy an Orange County home, don’t wait for interest rates to go up. You can save money now! Contact the team at Fred Sed & Associates today at (949) 272-0125 to get started with buying and saving money on the Orange County home of your dreams.