BETTER DEALS THAN THE TAX CREDIT!Today's low interest rates and rock-bottom home prices are offering much more value than the $8,000 and $6,500 tax credits from earlier this year. Check out the graph below for the estimated monthly Principal & Interest payments of different home prices at today's interest rate compared with one from just a few months ago. (All figures assume a 30-year conventional loan with 20 percent down payment and good credit.) See how much money 1.5 percentage points saves you over 30 years--$8,000 who?
In addition, lower rates mean increased purchase power. Check out the last column to see how much more home you can get at the lower rate for the same monthly payment. So in the first example, if interest rates rose by 1.5 percentage points and you want to maintain a principal and interest payment near the one shown at the lower interest payment, your purchasing power would be reduced from $100,000 to $87,609.
| Purchase Price | Loan Amount | Rate* | Monthly Principal & Interest
Pmt** |
Money Saved Over 30 Years | Increased Purchase Power |
| $ 100,000 | $ 80,000 | 4.5% | $ 405.35 | $ 26,745 | $ 12,391 |
| 6.0% | $ 479.64 | ||||
| $ 150,000 | $ 120,000 | 4.5% | $ 608.02 | $ 40,118 | $ 18,587 |
| 6.0% | $ 719.46 | ||||
| $ 200,000 | $ 160,000 | 4.5% | $ 810.70 | $ 53,490 | $ 24,783 |
| 6.0% | $ 959.28 | ||||
| $ 250,000 | $ 200,000 | 4.5% | $ 1,013.00 | $ 66,863 | $ 30,978 |
| 6.0% | $ 1,199.10 | ||||
| $ 300,000 | $ 240,000 | 4.5% | $ 1,216.04 | $ 80,236 | $ 37,174 |
| 6.0% | $ 1,438.92 | ||||
| $ 350,000 | $ 280,000 | 4.5% | $ 1,418.72 | $ 93,608 | $ 43,370 |
| 6.0% | $ 1,678.74 |
Why wait?
The current conditions are better than the government's stimulus package and affects ALL buyers, not just first-timers or move-up buyers. Do you need more space? You could potentially buy a bigger house for the same monthly payment you have today!
Talk to your HOME Real Estate agent to find out just how far your money could go, or go ahead and start the preapproval process today!
* Payments calculated using 4.662% Annual Percentage Rate for 4.5% rate and 6.177% Annual Percentage Rate for 6.0% rate.
** The payment provided does not include homeowner's insurance or property taxes, which must be paid in addition to your loan payment. Your actual payment may be higher. Your loan's interest rate will depend upon the specific characteristics of the loan transaction and your credit profile up to the time of closing. If the down payment is less than 20%, mortgage insurance may be required and could increase the monthly payment and APR.
