The United States real estate market has seen significant declines over the past half decade. Government Efforts, and the recent Europe crisis have caused mortgage interest rates to reach historic lows. This means that real estate everywhere is on sale.
Right now mortgage interest rates can be obtained for less than 4%. If you choose a 15 year mortgage, which reduces the term of your home loan in half, or an ARM, your mortgage rates are even better; sometimes approaching 3%.
Consider this, since mortgage rate statistics began the average mortgage loan rate has averaged around 8-9%. during the early eighties, mortgage rates peaked in the high teens. Current home loan rates are around the rate of inflation. Assuming that inflation remains at historic levels, the appreciation of your home value will be almost equivalent as the portion of the mortgage payment that goes towards interest.
A $100,000 mortgage loan for Sacramento luxury homes would have an interest payment of only $467.38 each month. in comparison, at 8% interest, the same real estate loan amount would be $733 each month. each month you would save $265, not because you bought a less expensive house, but because mortgage rates are at these record lows.
If you are real estate investing, or deciding whether to purchase a house for the first time, It’s important to examine the basics of the mortgage payment. the interest portion of the payment, as well as property taxes are essentially money you are wasting. This portion of your mortgage payment is essentially “rent money.” When your interest is going to be more expensive than “rent” for a rental, then the financial advantages of home owners aren’t there. the current, record low mortgage rates make home buying less expensive than renting for an equivalent property.
It’s not just a good time to buy because home loan rates are low, in addition, real estate prices are also down. in some areas home prices are down to the levels they were in the nineties. there are some incredible deals out there, especially if you purchase short sale and foreclosure properties.
Overall, the real estate economy makes right now a great time to purchase properties.
Tags: mortgages, real estate