It is for a blog post. It's not advertising rates, just providing a hypothetical. I'm just questioning whether or not it would require more information. Thanks for the help!!
Here's the full article:
A question a lot of us in the mortgage industry hear is, should I buy a home now or wait until I have more cash saved? Most of us would probably agree that having more money down is generally a good thing; however, the current availability of low down payment loans coupled with the historically low rates we are experiencing might be enough to encourage folks to buy now.
Let’s consider the value of low rates in terms of purchasing power. If you are comfortable with and qualify for a payment of $1,500 a month, in today’s market using FHA financing at 4% for a 30-year fixed loan that would translate to roughly $190,000 in purchase price depending, of course, upon the real estate taxes and homeowners insurance for the property. For this example I assumed taxes of $4,800 and insurance of $900/year.
While rates are currently low, during the last 50 years, the average interest rate for 30-year fixed loans was approximately 8.5%. So, the current buyer needs to keep in mind that rates will begin to increase at some point in time – probably sooner rather than later. A mere 1% increase in rates (still way below average, but probably realistic) would increase the monthly payment for that same house by $106 per month. Here’s another way of looking at it: sticking to the $1,500/month payment and accounting for a 1% increase in rates would result in a nearly $20,000 DECREASE in buying power!
This hypothetical example illustrates that the cost of waiting to buy could be significant. With several low down payment loan options available, such as FHA, USDA, VA and Fannie Mae’s MyCommunityMortgage, now might be the time to buy.
While the mortgage process can seem cumbersome and complex, a seasoned mortgage professional can help find the home loan product that is right for you. To get a conversation started, contact us at..."