Feb. 2, 2012
I did some math this morning when I saw 30-year mortgage rates still under 4%. That’s unbelievably low.
How low? For a median-priced Texas home of $150,000, monthly mortgage and principal payments come to $716. Compare that to December 2000, when the median-priced home was only $128,500 but interest rates were 7.65%. Plug those numbers into a mortgage calculator and you’ll get a monthly payment of $912.
So we’re talking about $196 less per month today compared to December 2000 … even though the actual median price of homes is $21,500 higher now. That’s a savings of $2,352 during a year or $70,560 over a 30-year loan.
Now, there are other factors involved. First, you have to do more these days to qualify for a loan than simply ask for one. Home prices in your neck of the woods may be higher or lower than the median. (Or perhaps your taste in homes is higher or lower than the median.) And if you really want to sharpen your pencil, you can figure out inflation, property taxes, your own income, and so on.
The point, though, is this: Low interest rates give buyers incredible buying power. If you’re wondering what you can afford or what it takes to qualify for these low rates, talk with a Texas REALTOR®.
