What Price Tag Can You Afford for a Home Purchase? Let's Talk Interest Rates
September 9th, 2023 - Amber Nestor - Firm Owner & Principal Broker
Image Above: Stock Photo
If you are a first time home buyer, and you are starting to consider purchasing your first home, you probably feel a bit like this little girl at the grocery store: in over your head. LOL
And you have every right to feel that way. So much is happening in the world, and in the real estate industry. I am here to make this process for you easy, and enjoyable.
In a nutshell, here's some basic advice I offer. If you depend on a mortgage to make your purchase, most likely what's going to best protect you and your family's future financial stability is a simple 30 year FIXED rate mortgage. This way there are NO surprises, and you take on NO risk for future harm nor future rate increases. You purchase a property that will produce for you a monthly payment that you can truly afford, and you build up your credit and your overall financial and tax position, and somewhere down the line HOPE that you can refinance with a lender IF rates improve, but don't expect to ever be able to do that. If that door of opportunity opens for you, great, but do NOT expect it to happen.
Below are a couple of examples of the the same BORROWED amount, but different compound interest rates. You can see how this impacts your monthly cash flow and expense budget. You can also see how this would impact the buying public and the real estate market at a whole: when the cost to borrow becomes more expensive, the buying public starts searching for less expensive price tags. Eventually, this could cause prices overall to trend downward in some, certain micro-markets, but NOT in all micro-markets. (That's a book to write on a another day.)
Anyway, check out these examples below. I pray that God blesses you with health, wealth, and wisdom. - Amber Nestor - Firm Owner & Principal Broker
Image Above: 8% Compound Interest Rate, Fixed
Image Above: 2.75% Interest Rate Fixed
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