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Mortgage Rate Update
Financial Reasons to Buy
There are a number of personal and emotional reasons to buy a home. But there are also some strong financial reasons to make the investment. Here are just a few of those reasons:
Increase Net Worth: Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.
A Big Tax Deduction: One of the largest tax deductions available is the amount of interest paid on a mortgage. In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year's interest. This amounts to a significant savings - effectively reducing the amount of a homeowner's monthly mortgage payment.
Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that's good news for potential buyers, it has overshadowed the long-term appreciation of a home's value. The reality is, despite market ups and downs between 1950 and 2002, US home prices appreciated at an annual growth rate of 4.8%. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 will grow in value to $364,000 over 30 years.
In addition, don't forget that the government is offering a tax credit of up to $8,000 for first-time buyers through June 30, 2010. The tax credit has also been expanded so that qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years can receive a tax credit of up to $6,500.
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Mortgage Interest Rates for Fixed Rate Mortgages*
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Rates as of Thursday, 10th December, 2009:
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Term
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Conforming
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APR
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Payment per
$1,000
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Jumbo
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APR
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Payment per
$1,000
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30-Yr. fixed
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360
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4.875%
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5.092%
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$5.29
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5.250%
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5.383%
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$5.52
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15-Yr. fixed
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180
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4.375%
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4.745%
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$7.59
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4.750%
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4.975%
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$7.78
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7-Yr. fixed ARM
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360
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4.875%
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5.092%
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$5.29
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5.500%
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5.635%
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$5.68
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5-Yr. fixed ARM
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360
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4.000%
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4.206%
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$4.77
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5.375%
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5.509%
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$5.60
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3-Yr. fixed ARM
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360
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4.875%
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5.092%
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$5.29
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5.375%
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5.509%
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$5.60
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FHA 30-year fixed
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360
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4.750%
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4.965%
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$5.22
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5.000%
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5.131%
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$5.37
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*Rates are subject to change due to market fluctuations and borrower's eligibility.
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Karl Peidl
Pleasant Valley Home Mortgage Corp.
305 Harper Drive, Suite 3
Moorestown, NJ 08057
© Copyright 2009. All About News, Inc.
The trend floats to locking right now. We'll see where it all takes us.
Definitely. We could see a shake up this afternoon after the 30-year Note auction.
Gosh, these rates look darn good to me!
Me too.
Thanks for the rate update. I can't believe how great they are. This is truly a wonderful time to be obtaining a mortgage.
Tom - It's a fantastic time to look into refinancing, and an even better time to buy a home.