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Realtors thoughts on interest rates

By all means, waiting for a lower interest rates does not necessarily mean more affordability & that’s even IF and when they drop.

If we’re talking about what’s more affordable on a $300,000 loan at 3% vs 7% interest, the answer is very clear and self explanatory.

Let’s assume a case study at 1234 fake street; home’s fair market value is currently $300,000 year-to-date & interest rate is 6-7.5%

By waiting another 2-3 years for interest to drop, is not going to guarantee the subject property(1234 fake street) is still going to be worth $300,000. Depending on the location and a few other factors, chances are the property’s fair market value will appreciate anywhere between 6-15% possibly even more. Which a 15% increase in value two years from now is $345,000.

As I’ve mentioned above, it can appreciate more than 15% in two years & totally depends on your market.

LOAN AMOUNT, type of loan, credit score, interest rate & PMI (if less then 20% down payment) is what ultimately determines the monthly payment on your LOAN.

Assume you put $0 down, a loan amount of $300,000 at 3% is an estimated $1,265 monthly & a loan amount of $345,000 at 3% is estimated $1,455 monthly

A loan amount of $300,000 at 7% is estimated $1,996 monthly, 20% down will bring loan amount to $240,000 at $1,597 monthly.

Most importantly, since there is less demand and sales activity, seller concessions are on the rise and you will never know of what opportunities are out there. Get a Pre-Approval Letter and if the numbers don’t make sense, tear it up, it’s that simple!

submitted by /u/Garlic_Alone
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source https://www.reddit.com/r/RealEstate/comments/16qqspd/realtors_thoughts_on_interest_rates/
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