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How do Interest Rates Affect Ability to Buy?

Helping make real estate dreams come true


Do our current low interest rates really make it a good time to buy a house?

First, take a look at what happens to monthly payments when interest rates go up. When interest rates go from 5 to 10% what happens?

A 5%   30 year $100k mortgage will cost $536.82 monthly
A 6%   30 year $100k mortgage will cost $599.55 monthly
A 7%   30 year $100k mortgage will cost $665.30 monthly
A 10% 30 year $100k mortgage will cost $877.57 monthly 
That is NOT including taxes, insurance, or anything but the mortgage itself.

As far as buying ability is concerned :compared to a 5% interest rate a 6% interest rate   drops the effective buying ability by 10% and a 7% interest  rate drops buying ability by about  24%.
There is a very large amount of buying ability taken away by a small 2% increase in interest rates. 

 
Have you received a Notice of Default on your property?  What are your plans?  Do you plan to walk away or do you want to try a Short Sale which has much less damage to your credit and helps you save face? You need a plan of action and if you want to buy some time, stay in the home until it sells and save up some money - then contact:

 Kathleen Lordbock REALTOR/Staging & Short Sale Specialist 

Keller Williams Realty Brainerd Lakes

Don't just walk away - there is hope, there is help!
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