Marvelous Mortgage Rates At 60 Year Lows Continue to Help Buyers and Sellers
Home loan mortgage interest rates continue to be a 60 year lows, which is fantastic for buyers and making sellers happy too. ______________________________________________________________________________
We've been working with a client who wants to find and buy a home here at Orange County in the range of about $550k and get a 30 year fixed conforming rate loan. Good news for this buyer is that he can get a $417k conforming loan at less than 4.5% fixed rate for 30 years, and his monthly payment would be about $2,150.
(See First Capital Mortgage Market Rate Watch Chart, June 26, 2010 - click here).
Lots of people have been focused on price and getting a "good deal" on price. They sometimes forget the current historically low interest rates, which have become an expected part of our market.
But low rates shouldn't be counted on forever. With so much stimulus money that the US government has poured into our economy, there is a threat of inflation in the future.
One of the ways for US government to counter that possible inflation is to raise rates and remove money from the market. But the economy has been down, and the Federal Reserve won't be able to raise rates in the short run. That will change, and home loan rates are predicted to increase to at 6% during the next year.
When interest rates rise, buyers will afford less of a monthly payment, and they'll get less of a home. For a buyer with an income of $100,000 and putting 20% down, an increase in interest rates from 5% to 6% is equal to a drop in home affordability from $590,000 to about $540,000.
Some buyers are waiting for that "great deal" on price. That might or might not happen. What will the waiting cost the buyers in terms of value and payment?
Even though mortgage rates are at this 60 year low, this won't last forever.
People should get going with their home selling and buying plans with these great loan mortgage interest rates, which is fantastic for buyers and making sellers happy too.
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Harrison K. Long, REALTOR® & broker, Explore Group, Coldwell Banker Previews, Irvine, CA. CA DRE #01410855. ExploreProperties@gmail.com. 949-854-7747. National Association of Realtors, California Association of Realtors, and Orange County Association of Realtors. California State Bar Association #69137. Serving Laguna Beach, Irvine, Newport Beach, Newport Coast, Costa Mesa, and South Orange County.
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Source of some information: Steve Thomas, Altera Real Estate
posted by Harrison K. Long @ 4:05 PM
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