5 Ways a Low Interest Rate Means It’s Time to Sell

5 Ways a Low Interest Rate Means It’s Time to Sell

Mortgage Rates are near historic lows! The Federal Reserve has kept them this way on purpose. Based on history I believe it’s safe to say they will NOT remain this low for long. It may be a smart idea to consider making a move or refinancing your home while rates are still low!

Your monthly mortgage payment is less.

You may be surprised to see how even a 1% rate difference can dramatically change your monthly payment.

Example 1:
Loan Amount= $150,000
Interest Rate =4.0 %

Monthly principal & Interest=$716

Example 2:
Loan Amount= $150,000
Interest Rate =5.0 %
Monthly principal & Interest=$805

You will spend less for your home.

If you’ve never looked at an amortization schedule, I recommend you do so. The amount of interest you pay on a home is staggering. A one percent increase in a Mortgage Rate can literally adds thousands of dollars of interest.

Example 1:
Loan Amount= $150,000
Interest Rate =4.0 %
Interest paid over 30 years=$107,800

Example 2:
Loan Amount= $150,000
Interest Rate =5.0 %
Interest paid over 30 years=$139,900

Qualify for more home.

One of the things a lender uses to qualify you for a loan is your debt to income ratio. When you have a higher interest rate, your monthly payment is higher. This increases your debt amount which can decrease the amount of home you are able to purchase. Often times by thousands of dollars! You can buy a more expensive home while rates are lower. If rates rise you will qualify for less of a mortgage and your payment may still be more.

Lock in a low rate for the long term.

If you acquire a fixed rate Mortgage then the low rate you receive will be locked in for the remainder of your term (example 30 years). Even while the general market rates increase. Many times your Loan is also assumable. I’ll touch on those benefits another day.

Build equity faster.

The lower your rate the more money you will have going to principal and less to interest. This gives you many more options down the road.

If you are thinking of buying, selling or refinancing, please contact us or give us a call today: 402-960-2330!

Chad Blythe

Blythe Real Estate Team

Nebraska Realty

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