Yesterday is Gone
Author: Denise Turrisi
Written On: Thu, 29 Apr 2010
Yesterday is gone, so while those historically low interest rates of a few months ago are unlikely to return; indicatively, now is the time to take advantage of today’s rates before they continue their trend upward.
Let’s look at the reality of the dollar amounts; specifically, for a 30 year fixed, comparing a 5.0% interest rate to a 5.5% interest rate on both a monthly and annual basis.
For purposes of this analysis, let’s also assume that monthly taxes and insurance remain equal for all situations and therefore, need not be factored.
The monthly mortgage payments (principal plus interest) are as follows:
A rate of 5.0% means a monthly mortgage payment of $1,879.
A rate of 5.5% means a monthly mortgage payment of $1,988.
The comparison of those rates then, on a monthly basis is $109 and on an annual basis, this is a difference of $1,308.
The Mortgage Banker’s Association anticipates at year end the interest rate will be at 6.0%; that means a monthly payment of $2,100. Comparing the monthly and annual to a 5.0% rate, the differences are $221 and $2,652, respectively. Over the life of the loan, that is a difference of more than $79,000!
Clearly, while historically lower rates are gone, there is no time like today to purchase a new home.
Please call today to speak to one of our exceptional brokers at Signature Financial Mortgage at 201-760-2700.
Let’s run your numbers today…
Because yesterday is gone!
