Two Questions About These Historically Low Rates

Interest Rates are "crazy low" and just is such an amazing time to look at purchasing (or perhaps refinancing) a home. Below you will see two questions that we are asked a lot about interest rates over the past week - I think you will find the information interesting! 

Question #1: Can rates go even lower? 

It is possible. But, I would expect a correction in the very near future, possibly even this week. Meaning, rates could bump up before heading back down. But, why be greedy when rates are at all time lows?

Question #2: What is the difference in a 4.25% rate and a rate of 6%?

6% is a pretty normal rate in a normal economy. Just how good are rates now? On a $200,000 loan, the difference in 4.25% and 6% is $213 per month! The 6% rate produces a payment of $1,193 vs. a $980 payment at 4.25%, a difference of 17.85%!

If you are wanting to move and have budgeted $1,500 a month for principal and interest on your new home (assuming a 20% down payment), you can buy a home today in the amount of $382,500. Compare this to when rates are at 6%: You can only afford a home in the amount of $314,375! 

So, where rates are today, you can buy $68,125 more home - a difference of 21%!

Keep in mind, this does not take into account inventory levels and the possibility of getting a great home at a much better price today than you might have a couple of years ago. 

Bottom Line #1: It has never been a better time to buy a home!

Bottom Line #2: It has never been a better time to look to see if refinancing is right! 

If you need help determing if now is the right time for you to purchase a home or refinance your existing home, feel free to email me at michelle.coolidge@cobaltmortgage.com or call me at (206) 909-3930.  I'm more than happy to help you look at your individual situation and help you understand what may, or may not, make good financial sense for you!

Have a blessed week!

Michelle Coolidge