Will you be buying a home in 2011? I think you should know that 'sooner than later' should be your resolution.

Below is an example of what happens when the interest rate increases. As you will see a 1% increase in rate reduces your loan amount by $28,000. So the choices would be an increase in monthly payment or decrease in loan amount. No matter what the price point this will carry true throughout...

Mortgage Calulator

Example One - Reduced Sale Price

Purchase Price Interest Rate Principal & Interest
$250,000 4% $1151.76
$235,500 4.5% $1151.48
$222,000 5% $1150.03

Note: Based on 30 year loan term, 3.5% down payment and includes Principal and Interest only. Does not include mortgage insurance, taxes, homeowners insurance which will increase payment further.

Example Two - Increased Payment

Here is an example of how your payment will increase if the loan amount stays the same and the interest rate increases. As you will see a 1% increase in rate increases your monthly payment by $143.32.

Purchase Price

Interest Rate

Principal & Interest

$250,000 4% $1151.76
$250,000 4.5% $1222.38
$250,000 5% $1295.08

Note: Based on 30 year loan term, 3.5% down payment and includes Principal and Interest only. Does not include mortgage insurance, taxes, homeowners insurance which will increase payment further.

Mortgage Calulator

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Posted by NMWelcomeHome Team Associates (505) 886-1432 on
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