THE LOW DOWN ON LOW INTEREST RATES

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Over the past 52 weeks, average 30 year fixed mortgage rates have varied from a high of 4.15% all the way to recent lows of 2.91% (mortgagenewsdaily.com). While most buyers understand that lower interest rates are a good thing, most don't realize how much historically low interest rates can affect buying power. To illustrate, let's explore an example. Let's say a buyer wanted to keep monthly payments at or under $2,600 per month. If that buyer was searching for homes when interest rates were highest, the max budget would be $410,000, assuming a 4.15% 30 year fixed rate mortgage, 20% down payment, homeowners insurance policy of $1,800 annually, and 2.5% annual tax rate. That same buyer could increase the max budget to $450,000 when interest rates dropped to 2.91%, everything else equal. See a breakdown of the monthly costs in both scenarios below. They would have to pay a little more down, but the difference in purchase price could make a big difference in the type of home you are able to purchase. For more information on the budgeting costs to purchase a home, click here

Comparing Interest Rates

This information is provided for informational purposes only and is not meant to suggest or guarantee same or similar costs incurred when purchasing a home. Compass is not offering legal or financial advice. Consult your financial advisor and/or lender for recommendations and specific information regarding the potential costs of your transaction.

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Houston, Texas 77027

Ellen Krantz

ellen.krantz@compass.com

m: 832.331.5218

Kyla Linn

kyla.linn@compass.com

m: 281.905.2760

THE KRANTZ LINN GROUP IS A TEAM OF REAL ESTATE AGENTS AFFILIATED WITH COMPASS. COMPASS IS A LICENSED REAL ESTATE BROKER AND ABIDES BY ALL APPLICABLE EQUAL HOUSING OPPORTUNITY LAWS. ALL MATERIAL PRESENTED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. INFORMATION IS COMPILED FROM SOURCES DEEMED RELIABLE BUT IS SUBJECT TO ERRORS, OMISSIONS, CHANGES IN PRICE, CONDITION, SALE, OR WITHDRAWAL WITHOUT NOTICE. NO STATEMENT IS MADE AS TO ACCURACY OF ANY DESCRIPTION. ALL MEASUREMENTS AND SQUARE FOOTAGES ARE APPROXIMATE. THIS IS NOT INTENDED TO SOLICIT PROPERTY ALREADY LISTED. NOTHING HEREIN SHALL BE CONSTRUED AS LEGAL, ACCOUNTING OR OTHER PROFESSIONAL ADVICE OUTSIDE THE REALM OF REAL ESTATE BROKERAGE.

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