Yes, you can. Rates on 30-year mortgages fell recently to the lowest level on record after the Federal Reserve launched a new effort to stimulate the struggling U.S. housing market.
Mortgage finance giant Freddie Mac said Thursday that average rates on 30-year fixed-rate mortgages dropped to 4.85% last week, from 4.98% the previous week. This was the lowest in the history of Freddie Mac's survey, which dates back to 1971, and was down a full percentage point from a year ago. These are truly historic times and they present a great opportunity to anyone who is thinking of buying.
If you or someone you know is ready to take advantage of historic low prices and historically low interest rates, please call me or send me your referral. Don't let this opportunity pass you by.
Here are specific example of the effect home prices vs. interest rates can have on your wallet:
Example 1. Home prices fall 10% and interest rates go up to 6%. Choose A or B
A. Purchase a home for $400,000 today with 10%($40,000) down and finance $360,000 at 4.85% on a 30 year mortgage, your monthly Principal and Interest(P&I) would be approximately $1899.69/mo.
B. Let's say there is room on the downside for home values to fall another 10% and room on the upside for mortgage rates to climb to 6%, and you decide to wait. If the price drops in value by 10%, then your home price would be 360,000. Put 10%($36,000) down and finance $324,000 at 6% for 30 years and your P&I payment would be $1942.54/month.
Results. For this hypothetical scenario the smart answer is A. Even though you saved $40,000 on the purchase price(Yea!!), you wound up spending an extra $42.85 per month(Boo!!) and if you pay this over 30 years without selling or refinancing, then you cost yourself an additional $15,426 and ended up not looking so smart if you chose B.
Example 2. Home prices fall by 5% and interest rates go to 5.50%. Choose A or B
A. Purchase a home for $400,000 today with 10%($40,000) down and finance $360,000 at 4.85% on a 30 year mortgage, your monthly Principal and Interest(P&I) would be approximately $1899.69/mo.
B. Home price falls by 5% to $380,000, 10% or $38,000 down and finance 342,000 at 5.5% for 30 years. Approximate P&I is $1941.84
Results. Again, A is the smart choice. If you chose A over B then you would have saved $15,173.42 over the full 30 year mortgage term.
I know it sounds crazy to spend more for a house but pay less for a house. However, if you believe that there is room on the upside for mortgage rates, then you are smart to buy now and save money in the long run.
Your Realtor,
JJ Leininger
There are no new listings, sales, escrows or price changes to report this week. There are currently two active listings in the neighborhood. Click here for more information on the homesite at 4148 Puahala, which is listed at $389,000. This is a prestigious corner lot at the main entrance to the subdivision.
Click here for more information on the home listing for 2505 Kanio Street which is listed at $925,000. This is a large home at the end of a cul-de-sac and has a fenced back yard.
Go to KauaiFineHomes.com and search all Kauai and Hawaii properties for sale in the MLS (Multiple Listing Service).
At the Annual PHA board meeting earlier this month, there was good food, fun, and prizes. I won walkie talkies! The Neighborhood Watch Program was one of the topics discussed at the meeting. This neighborhood has pride. I have recently observed neighbors mowing, leaf blowing to clean up the grass clippings, and picking up garbage along Nuhou Street. Volunteers have been maintaining the PUAKO sign at the neighborhood entrance, the plants put in last year still look great. Mahalo for your Kokua. JJ Leininger President of the Puako Homeowner's Association.
In the past 30 days, there are 2 new listings, 0 sales recorded, 3 escrows, 0 withdrawn or expired listings, and 7 price changes(all 6 are price reductions, 1 is a price increase) to report.
MLS#222358 $305,000
MLS#222157 $429,000
There are 19 active land listings in the MLS ranging in price from $265,000 to $449,000. Please e-mail JJ@KauaiFineHomes.com for a complete list with links to view photos and property details, or go to KauaiFineHomes.com and search all Kauai and Hawaii properties for sale in the MLS (Multiple Listing Service).
The Pikake Homeowners Association had their first annual homeowner’s meeting earlier this month. The initial board of directors is composed of Pikake owners/ Grove Farm employees. The homeowner's dues are $30 per month, billed quarterly. As always, please feel free to comment on this or any of my blog posts. I enjoy hearing from you.
Since this most recent bubble burst, we have had 2 Fannie Mae owned properties sell on Kauai, 1 in 2008 and 1 in 2009. There is currently 1 Fannie Mae owned Princeville condo with a sale pending, and 1 with offers pending. Here is the link to the lowest price Active Fannie Mae owned property on Kauai, a Halelani Village at Puhi Lihue, Hawaii 2-bedroom condo listed at $169,900:
Contact me for available Kauai properties, as I have several active listings with more in the pipeline.
This week, Fannie Mae announced new initiatives in response to the Obama Administration's Making Home Affordable Program and the related Home Affordable Modification. To read the entire press release regarding Fannie Mae's new initiatives, Home Affordable Refinance and Home Affordable Modification, visit:
http://www.fanniemae.com/newsreleases/2009/4631.jhtml?p=Media&s=News+Releases
In addition, Fannie Mae has suspended all evictions through March 31. To read the entire press release regarding the eviction halt, visit:
http://www.fanniemae.com/newsreleases/2009/4635.jhtml?p=Media&s=News+Releases
Aloha,
JJ Leininger
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Making Your Dreams a Reality in Kauai Real Estate
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