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Welcome to my Real Estate advice column, “Dear Don,” where I answer all your burning Real Estate questions. Send yours to me at donkoonce@windermere.com, and I’ll try to answer them in future columns.
Dear Don:
Aren’t interest rates too high?
Anxious Anne
Dear Anne:
While interest rates have crept up in recent months, they haven’t reached a level that would prevent most buyers from obtaining a mortgage. The rates are nothing like the early 80s when they peaked at 18.63%, and people were still buying homes at those crazy rates!
As the rates creep up, your buying power is reduced, however. As an example, on a $250,000 purchase price with 15% down payment at 4.5% interest, your monthly payment would be approximately $1,077 monthly. But at 5.5%, the payment would rise to $1,207.
If your budget for a monthly payment was $1,077 and the rates went to 5.5%, then your new purchase budget would be approximately $225,000.
While price increases have slowed, they are still rising. Keep in mind, you can always refinance, but you can never change the purchase price of your home.
Warmly,
Don
Are you ready to take the plunge into the Real Estate market? Don’t do it alone. My mission is to help you achieve your life goals. Contact me today at 206-250-7291 or donkoonce@windermere.com.
