Interest rates are very low today by historical standards….and they are on the rise. If you plan to have a mortgage on your next home, then act today. An increase in mortgage rates could wipe out any anticipated reduction in your monthly payment that you may have realized from Tampa’s lower home prices. While the Jimmy Carter era saw interest rates soar to 18% and push home ownership out of reach for many, Doug & Annette Bohannon still found ways to help people buy & sell homes in Tampa. “Today we see the printing presses churn out US Dollars to pay for the trillion dollar bailouts, and the value of those dollars is falling. We expect interest rates to increase”, according to Doug Bohannon.
30 Year Conventional Mortgage Rates 1970-2008
Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today’s rate of 5.5%. Monthly principal and interest come to $994.31. Let’s say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you’d have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you’d rather not be. Full Article.
- by Dale Bohannon
