Mortgage Market Update - Can I afford $3,000 more in my Sales Price?

This is a simple one that many still struggle with. Just he other day had a Realtor want me to specifically give an exact dollar amount for a prequal. For the record, this is impossible in that every property is different based on the property taxes and home insurance. The best that any lender can do today is provide a range that makes sense based the buyers qualifications and needs.

As home values have fallen some property assessments have remained the same or gone up. Typically many have used a calculation of 1.25% of the sales price to calculate taxes. Today the best practice is to pull the exact tax amount from the county web site. We have provided a link for every county in the US on our site in the Home Loan Toolbox page. Just scroll down and click on the Property Tax Resource page, click on state, choose county and select Tax Commissioner for that county.

In addition, to the property tax differences most still don't realize the payment differences based on every $1,000 financed. look at the differences below.

30 year Fixed 30 year Fixed
Interest Rate Cost Per $1,000 Cost Per $10,000

5.5% $5.68 $56.80

6.0% $6.00 $60.00

So as you can see the differences per $1,000 is very small in the payment for a 30 year fixed. So when someone is looking put down another $2,000 or raise the sales price $2,000 so that the seller can pay for some of the closing costs, you can no see how small an impact it is.

So to sum this up as best practice for any agent when working with buyers - you need to not only know the price range but also have an understanding of the payment. Partner with your loan officer when looking at making offers and writing contracts so your buyer has the right expectations.

MORTGAGE RATES Loan Programs Interest Rates* 30 Year Conv. Mid - low 5's 30 Year FHA/VA Mid - low 5's 30 Year Jumbo Mid 6's 5/1 Arm Conv. Low 4's 5/1 Arm Jumbo Mid 5's Please contact us for specific situations and specific rates. *Risk Based Pricing will affect rate offered. MORTGAGE RATE TRENDS DAILY RATE LOCK ADVISORY For an in depth explanation and daily update click on The Daily Rate Lock Advisory. A copy of this newsletter can be found at Market Update. also check out Quick Tips and Home Loan Toolbox