Austin TX and the surrounding suburbs is a great place to buy, NOW! Why? A few days ago, I talked about how Interest Rates are Down, but I didn't explain it in price of affordability terms. What do I mean by that? I mean what you can afford today will be vastly different than what you might be able to afford next year if rates go up.
For example, rates are about 4.25% right now. Some lenders are higher and some are lower, and it also depends on your credit scores and credit history, but on average, 4.25% is a good estimate. Let's say you can only afford and qualify for a mortgage payment of $2000 which is to include taxes and insurance as well. With today's interest rate, assuming a 5% down payment and a 2.3% tax rate (some areas are upwards of 3% and other areas are downwards of 1.8%), you can afford a home of approximately $295,000.
Let's say rates go up to 5%, which is still fairly low. To keep that same $2000 a month mortgage payment on a house for sale in Austin TX, you would be looking at a sales price of approximately $277,000. And let's go one more step and say rates go to 5.5% in a few months, which is, again, still fairly low historically. To keep the same $2000 a month mortgage payment, you would be looking at a sales price of approximately $265,000.
Is there much of a difference between $295k, $277k, and $265k? Oh yes there is! There could be a difference of a newer home, a larger lot, a better view, maybe a pool, probably a fourth bedroom AND a study instead of one or the other... possibly a Gameroom AND a Media room instead of one or the other.
And, if rates happen to jump up to 6%, you're looking at a mere $256,000... your buying power goes down and down...
**Note, these examples do not include mortgage insurance that you would have for putting down less than 20%.
The price difference could also potentially mean one school district over another if you're trying to get into a "better" area. You might be keeping that same $2000 a month mortgage payment, but what does that $2000 a month get you? What are you looking for in a home for sale in Austin TX? Contact me today, and I can help you figure it out!
**Are You Packed Yet?**
Austin TX Real Estate
and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way.
** Multi-Million Dollar Producer Year after Year **
Copyright© 2011 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* If Rates Go Up - Buying Power Goes Down - Buying a House Today * was first published on donnahomesblog.com.