INTEREST RATES BACK DOWN by Paige Marsh
If you are on the fence about whether to pursue buying or building a home this year, look to the current interest rates for your answer. From a recently published table sent to me by a lender friend of mine, the first quarter of 2015 has a current average rate of 3.72%, which is a whopping 3.5% lower than the 30 year average.
(see http://www.mediacenternow.com/temp/15678_2.pdf?gd=56cea3d9-c60c-4ba9-aa8d-ba8f0046b3ee)
Looking at this rate versus the 5.87% interest rate from 2005 (remember when THAT was a good rate??), you can see why this is such a terrific time to lock in payments for a 30 year mortgage:
Purchase price of $200,000 with a 20% down payment:
Loan amt $160,000 at 3.72% P&I only: $739 per month
Loan amt $160,000 at 5.87% P&I only: $946 per month
You can see how that is a savings of over $200 a month. Would you rather pay $739 or $946 for the EXACT SAME HOUSE? This is a really good thing to consider right now as it has been projected by some financial analysts that the interest rate could increase to 5% by the end of 2015. If this does become the case, then you really could be faced with the scenario of deciding whether you want to pay $739 or $946 for the exact same house. The only factor that will determine getting the lower payment will be your timing. Purchase sooner and guarantee getting the better rate. If you wait, you could possibly be throwing a few extra thousand dollars away each year in interest charges. I can think of many different ways that I could better spend that extra money – like a family vacation!
