Important News and Techniques for Today's Real Estate Market

I recently had an opportunity to talk with Deborah Simmons at Wells Fargo Home Mortgage, one of the top loan officers in the business.  She gave a formula that I think is very interesting, since it demonstrates the power that the HISTORIC LOWS we are seeing on interest rates gives to the buyers out there...

“In simple terms, every 1% increase in home loan rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and interest rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment. That’s why it’s so important to take advantage of today’s opportunities before there’s even a slight change higher in rates.”

This works both ways, Guys!  A drop in interest rates by 1% means that your purchase power is now increased to $200,000 from $180,000!  While I'm not a fan of spending more than you have to spend to find your dream home, you have to admit that having more wiggle room in your price target certainly opens up more OPTIONS. 

Deborah can be reached at 770-486-2622.