What a week we had last week in the stock market, and with the S&P downgrade, this week is likely to be just as disconcerting since Moody’s just announced they are watching this Administration’s actions carefully as well. The full ramifications for us “average citizens” is yet to be determined, however, there is concern that interest rates might rise for mortgages, car loans and credit cards.
What difference can a mortgage rate rise mean to you?
The average interest rate for a 30-yr fixed loan in June 2011 was 4.5%. If that average increases only 1.4% (to 6.5% interest) that can equal a 25% increase to your payment amount or it can mean that you’ll have to shop for a lower priced home if maintaining a certain mortgage amount is critical to you being approved for the loan.
Homeowners, who have a home for sale, may want to consider lowering their price to get their home in contract now, so they can buy at the lower interest rates we have now. A price decrease on your current home may cost you less than the interest rate increase on your next home.
Impact of Mortgage Payment for 3 Home Prices @ two interest rates
| |
$200,000 |
$300,000 |
$400,000 |
| Loan @ 20% down |
$160,000 |
$240,000 |
$320,000 |
| 4.5% rate |
$811.20 |
$1,216.80 |
$1,516.80 |
| 6.5% rate |
$1,011.20 |
$1,516.80 |
$2,022.40 |
| Extra Paid/Yr |
$2,400 |
$3,600 |
$4,800 |
| Extra Paid/5 Yrs |
$12,000 |
$18,000 |
$24,000 |
Now’s a good time to buy
OK, you often hear that phrase from Realtors® and from the National Association of Realtors® TV ads. If you doubt it, take a look at this chart of the mortgage rates since 1972. Notice that the average rate for 1972-2010 was 8.92%. Think about how much more home you can purchase at today’s current rates vs how much you might have to drop down in price if rates were to return to the nearly 9% average rate. I’ve purchased homes in ’72, ’76, ’85, ’95, and ’97 so I know what a difference the higher rates can mean.
Click to enlarge
If you want to see if you can afford to buy now, call Pam Mahon, Home Mortgage Consultant with Real Living Mortgage at 614-273-6366. She’ll walk you through your options to tell you what price of home you can be approved to buy.
Other news you need …
As Washington tries to work us out of this mess, keep a watch on their discussions about cutting the mortgage interest deduction (often referred to as MID) that we currently can take on on Fed Tax Forms. Some politicians want it to be eliminated completely while others suggest elimination only on more expensive homes ($500,000 has been bantered about). “Washington-speak” may call that a “loophole”, but it’s a tax increase for us citizens. The National Association of Realtors® is working hard to fight this elimination because it removes even more money from people’s wallets.
Copyright © 2011. Elaine Reese, Real Living HER. Reproduction of any portion of this blog post or the images is prohibited by the Digital Millennium Copyright Act. If this post is being viewed on any site other than www.ReesesPiecesOfRealEstate.com then the material has been stolen without permission. Violators will be reported.
On Monday of this week, I wrote about the possibility of future mortgage rates rising in the wake of the S&P downgrade. Well, as we all know the stock market went down - up – down – up - that left many of us feeling like we had vertigo.
Will your land line decide to call 911?
Since police are seldom in my neighborhood, especially at that hour, I didn’t know what to expect. Would guns be drawn????
The officer asked if I had called 911. I hadn’t. He then asked if my phone number was xxx-xxx-xxxx. It was an old land line number that I had canceled 3-4 years ago when I went with my cell phone exclusively. He told me to call the phone company to report it because sometimes these unused lines transmit noise that calls 911. When the 911 operator doesn’t receive a response, they notify the police.
Trying to call Verizon was no small feat because none of their automated options dealt with this problem. Finally, today I was able to speak with a “real” person who had heard of this happening. She took all my info and will report it. I’m not sure what will be
done, but I’ll keep you posted. As more people cancel their land line phones, this problem may become better known.
Let this be a warning to all of you who have also canceled land lines … WEAR PJ’S! You never know when the police will knock on your door. BTW, I told the officer that he might want to stick around since my adrenalin was so high that I might just have a heart attack and really need their help.
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Posted in Central Ohio, Commentary, Delaware County, Delaware Ohio
Tagged 911 errors, central ohio real estate market news