How Interest Rates Affect Your Buying Power

Dated: 11/17/2013

Views: 1896

In his latest interview on Real Estate Radio Northwest, Justin Mitchell, Team Troy Buyer's Agent, touched on interest rates, the home mortgage process, the importance of pre-approval and buying power. It is essential to know that mortgage rates are still low, and should continue that way into 2014. Check out our earlier post on interest rates for more information on that. If you are thinking of buying a home, the time is now. Many do not realize how much low interest rates can increase their buying power and lessen their monthly payment. Not only that, but you can actually pay off your house sooner if a smaller percentage of your money is going towards interest.

The chart below describes how mortgage rates can affect your purchasing power. A 1% rise in rates, like from 4.5% to 5.5% can be the difference in qualifying for a $600,000 home and a $535,000 home. Of course, your monthly payment also takes into consideration the length of the loan, the type of loan, insurance, taxes and price of the home. Arguably, the biggest factor of home affordability is the interest rate.

You can talk to a Team Troy preferred lender today or visit the Finance section of our website for more information. Bottom line: If someone wants to loan you money on the cheap - why not take advantage of it while it lasts?

Troy Anderson

~Married with 2 children ~Turned grey prematurely ~Fetish for all things Apple ~Urban chicken farmer ~Enology (wine making) student @ WSU ~14+ years of Real experience “Here at TeamTroy we h....

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