You Can Buy A House Now or You Can Buy One Later
There is speculation that interest rates will go up. The thinking is in order to pay for the bailout it will come from 10 Yr Treasury Bonds. Without getting into all the technicalities of how the Treasury Bonds work and yada, yada, yada… Rates should go up.
When a person applies to get a home mortgage loan the end qualifying is based on a monthly payment. Let’s assume a person’s monthly income does not increase dramatically over the next year.
Here is what a $1,500 per month payment looks like if rates go up.
| $1,760.00 | @ | 5.25% | = | $320,000.00 |
| $1,760.00 | @ | 6.00% | = | $294,700.00 |
| $1,760.00 | @ | 6.50% | = | $279,540.00 |
| $1,760.00 | @ | 7.00% | = | $265,566.00 |
| $1,760.00 | @ | 7.50% | = | $252,680.00 |
| $1,760.00 | @ | 8.00% | = | $240,775.00 |
The difference is a pretty big.
