Think You Should Wait?

Do you think that since you missed out on the tax credit you should just wait? Sit on the fence.  See what’s going to happen.  Maybe just sulk a little? It always burns to know you missed out on something someone else received but I think a little perspective is in order.  Let’s do the math.

Four years ago, on a $250,000 home with 20% down and an interest rate of 6.6%, your monthly principal and interest payment would have been $1277.32.

Today with that same $250,000 home with 20% down and an interest rate of 4.37% (wow!), your monthly principal and interest payment would be $997.98.

That’s a savings of $279.34 a month.

Even if we just look at the drop in rates since the tax credit expires, things are looking good.  On April 30, 2010 the average mortgage interest rate was 5.06%, using all the same figures your monthly principal and interest would be $1,080.99. 

That’s a savings of $83.01 today.  If you had purchased during the tax credit you would have received $8000 from Uncle Sam.  If you save that, it would come to approximately $22 a month for 30 years.  So even with all the hoopla surround the tax credit you are SAVING $61 a month RIGHT NOW.

Not what you expected, is it?  So before you decide to wait and see what happen just look at the numbers.  Interest rates are at historic lows- take advantage of it!

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