Aliso Viejo
 

Financing Your Aliso Viejo Real Estate Purchase

Value of Locking in a Low Interest Rate

Posted on January 18, 2011 by Matt Cabrera.

In regards to financing a purchase in today's market, I'm sure you are aware that interest rates are still hovering around all time lows.  To help you guage how much money a lower interest rate saves based on today's interest rate around 4.9% for a conventional loan, I compared increases to your monthly, annual, and total loan life payments between a $500,000-$800,000 purchase. 

For example, a $800,000 purchase with a 30 year loan at 4.9% interest and 20% down yields a monthly payment of $3396 (excludes taxes and insurance).  If on the same purchase the interest rate is 1/2% higher or 5.4%, then your monthly payment increases $197, annual payments $2365, and the total payments over the life of the loan by $70,972! 

For a $500,000 purchase on the other hand, your monthly payment increase $123, annual $1478, and total loan life payments by $44,357.

As you can see, monthly payment is a major deciding factor in how much a buyer is willing to pay for a home and locking in a low rate that may not exist for years to come can save thousands of dollars. 

For more information on financing, including how to prepare for home ownership and get pre-approved, please call us at 949-545-8486 or contact us via our website.

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