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How cheap is financing right now? This is another question we hear often at the Dan Jones Home Selling Team, so we thought we would take a stab at answering it here today.
Many people think borrowing money is going to remain cheap, as rates have been near record lows over the last few years. But how much longer can we truly expect these great conditions to last?
Most experts expect rates to rise by the year's end. To show the kind of effect this will have on your spending power, we'll give you an example. If an individual who makes $50,000 a year and has no debt, puts $20,000 down on a mortgage, this is what they could afford in four different scenarios:
- 3.5% interest rate: $295,000
- 4.5% interest rate: $270,000
- 5.5% interest rate: $248,000
- 10% interest rate: $178,000
As you can see, a small jump in interest rates will substantially affect your spending power.
If you would like a more detailed breakdown of how important low interest rates are, give us a call or shoot us a quick email. We would love to help you take advantage of these extraordinarily low rates!
If you would like a more detailed breakdown of how important low interest rates are, give us a call or shoot us a quick email. We would love to help you take advantage of these extraordinarily low rates!
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