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Low Interest Rates Make Huge Difference on Your Purchasing Power

by Alan Daniels

Interest rates for a 30 year fixed rate mortgage are currently around 3.92% according to Freddie Mac's latest Primary Mortgage Market Survey which is still near record lows when comparing to the last 50-60 years.  Your purchasing power and the amount of home you can afford is greatly impacted by the interest rate you secure when buying a home so make sure to plan out your 2018 plans in a winning way.  

Purchase Power Defined - The amount of home you can afford to buy for the budget you have available to spend.  The price of house you can afford decreases as rates increase.  Note:  The same applies as housing prices go up.

The graphic below shows what impact rising interest rates would have if you planned to purchase a home within the national median price range, and planned to keep your principal and interest payments between $1,850-$1,900 a month.

Colorado Springs Homes For Sale - Buying PowerWith each .25 percent increase in interest rate, the value of the home you can afford decreases by 2.5% (this example shows $10,000). Experts predict that mortgage rates will be closer to 5% by this time next year.

Home Appreciation Factor - Homes locally could increase in value by around 6% in 2018.  So in this example your dream home of $400,000 could turn into $424,000 by year end pushing your purchase power even further down.

Conclusion:

Make sure you schedule a meeting with your Colorado Springs Realtor to better advise you on your plans and what is best for your situation no matter how far out your home buying plans are.​​

Mortgage Rate Increase!

by Alan Daniels

There are countless forecasts that the interest rates are going to rise in 2016.   It is important to consider what rates will do if you are planning on purchasing a home in 2016 or beyond.  Below is a chart showing the forecasted rate increase which could impact your purchase power when buying a home.

Colorado Springs Mortgage Rates 2016

Now that you see where rates are forecasted to be here is a table showing how interest rates would impact the purchasing power of a prospective buyer on a $300,000 home.

Easy to see that if you are considering a home purchase, purchasing sooner rather than later will most likely make more sense financially over time.  Contact us today to put a 2016 plan together for you.

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