Low mortgage rates

Mortgage rates are at historic lows.

Though some buyers are waiting for home prices to hit rock bottom before entering the market, buyers that are looking to take advantage of long-term savings realize that now is the perfect time.

Mortgage rates are lower now than they have been in more than 40 years.

Below is a chart that lists
1. a sampling of recent fixed mortgage rates (Feb 2010, May 2004, Dec 1999 and Jan 1995)
2. how the rates would affect the monthly payments on a $350,000 home
3. how much more you’d pay monthly if you were to buy at higher mortgage rates, compared to the Feb. 2010 rate
4. how much more you’d pay after 30 years if you were to buy at a higher interest rate

 

Month	1. Rate	2. Monthly payment ($350,000 home, 30 year, fixed rate)	3. Comparative savings, monthly	4. Comparative savings, 30 year
Feb 2010	4.99	$1,876.74	$977.30	$351,828
May 2004	6.27	$2,159.56	$267.83	$96,419
Dec 1999	7.91	$2,546.25	$654.52	$235,627
Jan 1995	9.15	$2,854.04	$962.31	$346,432

Source: bankrate.com
*These payments do not include taxes or insurance.

Said simply, waiting to buy may cost you.

If you wait to buy a home thinking prices will fall, you run the risk of interest rates climbing higher. Plus, timing the market is never a sure bet because you only know the market hit bottom when you see it in the rearview mirror. Taking advantage of low mortgage rates is guaranteed if you act when they are still low.

This is good news for sellers too. With low rates, more buyers will be able to enter the market.

Borrowers are advised to consult a mortgage professional to determine mortgage availability and current interest rates.