Low Mortgage Rates Make Denver Real Estate, and All Real Estate, a Good Buy
If you are in the market to buy a house,sell your house direct this is the time to do it. For potential homebuyers who qualify, mortgage rates have again reached record lows, meaning hundreds of dollars of savings each month and year, as well as tens to hundreds of thousands of dollars in savings over the course of a 30-year, fixed-rate mortgage. Mortgage rates are usually expressed in percentages, but this article will use Denver property value estimates to illustrate the sheer magnitude of potential savings available to homebuyers who purchase now.
When examining mortgage rates, it's better to use actual home prices and figures, as they demonstrate the real saving (or costs) that small changes in interest rates entail. For example: the 30-year fixed mortgage rate fell to 4.17 percent this month, its lowest level ever, with rates for the same type of mortgage at 4.75 percent in June 2010 and around 6.3 percent in October, 2007. That doesn't sound like a big deal, right? Just a couple of percentage points, nothing to look twice at.
But, in fact, these small changes in percentages mean big savings in the short term, and huge savings in the long term. Take for example Denver property: the average median home price for Denver real estate rose to $217,740 in June 2010, its ninth straight monthly increase; if someone were to purchase a Denver home for sale at the median price, their average monthly payment on a 30-year mortgage would vary widely based on the interest rate.
Were homebuyers to purchase now, with interest rates at historic lows (4.17%), their average monthly payment would be $1068.98. Had they purchased in June 2010, when rates were only 0.6 percentage points higher (4.75%), their average monthly payments would be $1135.83. That's over $66 of savings every month, over $800 of savings every year, and over $24,000 of savings over the life of the loan for the homebuyer who purchases now!
Moreover, if (or when) interest rates recover to more normal rates (and even the 2007 rate mentioned above and used for this calculation, 6.3 percent, is relatively low), the average monthly payment jumps to 1,347.75.
That means today's low interest rates can save you over $278 every month, over $3,300 every year, and over $100,000 over the 30-year life of the loan when compared with more normal historic rates!
So the small changes in percentage points mean huge dividends in the Denver commercial property market as well as in all others across the nation. While average monthly rental payments may still be cheaper than average monthly mortgage payments, the ability to resell and gain back the value of your mortgage, as well as the thousands of dollars in annual tax deductions that homeowners - not renters - can claim, make now one of the best times ever to purchase a home.
Advertise on APSense
This advertising space is available.
Post Your Ad Here
Post Your Ad Here
Comments