Buying a Home Now can Save You Money!
Buying a home right now can save you money. You may be wondering how that is possible – buying a home is a major investment, right?
The key is the historically low mortgage rates! The current 30-year mortgage rate is 2.98%, and this is the first time they have been below 3% since Freddie Mac started publishing rates in 1971.
15-year mortgage rates are averaging 2.61%, which is down from last year’s average of 2.64%.
So, how does this help you save money? As rates keep decreasing, your purchasing power increases. This means that even if home prices are rising, you have a great opportunity to lock in low long-term rates.
How Does Purchasing Power Work?
A decrease in interest rates means that you can get more bang for your buck – you can spend the same amount you planned on while getting a home valued more!
Let’s take a look at an example to see how this works, assuming interest rates drop 1% from 3.8% to 2.8%:
As a first-time homebuyer, let’s say you wanted to take out a 30-year mortgage for $275,000 in southern New Jersey – at 3.8% – you could expect to pay about $1,280 per month. If interest rates have dropped to 2.8%, that same home will only cost you $1,130 per month!
This means you will save a staggering $54,000 in interest over the 30-year loan term!
Consider another example in which you are buying a home in southern New Jersey, and the highest monthly mortgage payment you are willing to make is $1,400.
At a 3.8% interest rate, you are limited to purchasing a home valued at $300,500. With 30-year mortgage rates at 2.8%, you can buy a home worth $340,750 for the same monthly payment. That means your purchasing power increased by $40,250!
As you can see, buying a home now can save you quite a bit of money. It can even allow you to buy your dream home without having to increase your monthly budget! Take advantage of this opportunity by hiring a buyer’s agent now because waiting to buy means risking a decrease in your purchasing power.
Start your journey today by contacting a Sail Lake Realty Agent here!