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Mortgage Rates at “Historic Lows”, “60 Year Lows” & “40 Year Lows”

Posted by Breckenridge Associates Real Estate on Saturday, January 7th, 2012 at 8:59pm.

Whatever the headline reads we can all agree that mortgage rates are really low. The benefit of these low rates to Real Estate Buyers can be substantial. The difference between a rate of 4% and 5% on a 30 year mortgage loan of $600,000 can amount to $128,000 over the life of the loan, or $350 each month.

If you are waiting for the Real Estate market to drop another 1% or 2% before you buy, consider the following. If rates go up just ½% you will possibly pay $15,000 less for that $750,000 house and end up paying $63,000 more in interest over the life of the loan.

You may have heard that the Federal Reserve has promised to keep rates low until the middle of 2013. The problem is that they can and do change their mind if the economic outlook changes. In addition, the Federal Reserve controls short term rates not mortgage rates. Don’t be misled into believing that mortgage rates will stay this low for the next 18 months. There is no guarantee that rates will stay this low. Now is the time to take advantage of fantastically low mortgage rates and save for years to come.

Even cash Buyers should consider financing a portion of their purchase price. With 15 year fixed rate loans below 3.5%, it is possible to invest this loan money and actually make more than your cost of 3.5%. While some will prefer the comfort of knowing their home is paid for, time should show that borrowing money for 15 years at 3.5% was a profitable decision for most.

Kevin Berkley is a CPA and Mortgage Loan officer with Colorado State Bank and Trust in Breckenridge.

Now is the time to buy real estate in Breckenridge. Please contact us to learn more about real estate in Breckenridge and Summit County, Colorado. 800.774.7970 or 970.453.2200. Click here for the latest news about Breckenridge Real Estate.

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