Take advantage of the low interest rates now, see why!

After you are done reading this call me

In the last few weeks I have been bombarded by loan officers, telling me about the "LOWEST INTEREST RATES IN HISTORY". But I remain amazed that not more people are taking advantage of these low rates, they won't stay there for long, and before you know it they'll be approaching double digits.

But how do interest rates actually affect your buying power? It should come to no surprise that your monthly payment is directly related to the loan amount and the interest rate. Change either of these and your monthly payment changes, and thus so does your buying.

Using an online mortgage calculator I ran 3 scenarios, all assuming the the home buyers had a house hold income of $75,000, I used the default ratios - I am not a loan office, I am a real estate agent :)

So, based on a $75,000 house hold income and a desired monthly payment of: $1,400

Interest rate: 6%
loan amount: $233,508

Interest rate: 5%
loan amount; $260,794

Interest rate: 4.25%
loan amount: $284,588

As you can see that with only a 2.25% drop in interest rates your buying has increased significantly to more than $50,000! Now with this low interest rate, a fixed 30 year loan you can have the home of your dreams right from the start! Why? Imagine this same home buyer facing interest rates of 8%, as some experts predict by 2011, his buying power changes dramatically, but in an entirely different direction:

Interest rate: 8%
Loan amount: $190,797

Now our buyer has to settle for something other than his dream house. If you are considering making the move to purchase a home in South Hampton roads time is of the essence! Interest rates will not stay low and the median home price has gone up since this time last year.