Shepherd Tree Realty

I hear a lot of people saying they are going to wait to purchase a home because they think the prices are going to go down. If you are on the fence about buying a home, consider the fact that interest rates are rising. As the rates rise your purchase power decreases. Take a look at the different purchase prices shown below along with the payment. IF (emphasis on IF) the price decreases in the future, the higher interest rate would result in a higher monthly payment. Even if the prices level out and the interest rates have still increased, you can see a more significant increase in monthly payment. Full disclosure: I am not a lender, but this isn’t rocket science. These are approximations of payments of principal and interest only; does not include property taxes, insurance, and PMI if applicable. I have a team of lenders I can refer you to who can go over your specific situation. Let’s strategize and create a plan for you.

$400,000 at 3.5% = $1796
$375,000 at 4.25% = $1845
$350,000 at 4.75% = $1826

What if the price stays the same? Which is more likely than a price decrease.

$400,000 at 4.25% = $1968

Happy early Valentine’s Day!