Interest rates seem to be the big topic of the day lately with rates dropping then rising then falling and jumping. Yes, it has been a rocky road, but we have a lot of clients that want to move up down or sideways but they have this 3.5% interest rate or a 3.00% interest rate and they don’t wanna sell their house! Well, the good news with lower rates is more maneuverability! Let’s say I bought my house in October 2012 and I have a 3.125% – 30 year mortgage on my house I purchased for 560,000.00. My taxes are low and my house is now worth $950,000.00. I put 20% down and I owe $377,000.00 on a loan that started at $448,000.00. It has never made sense for me to move because my payment is $2700.00 and if I move down to a $750,000.00 house my payment would go up due to the new taxes and higher interest rates even if I get a smaller mortgage. If I move up then my payment would be a huge amount more! I will keep Prop 13 out of this for now and let’s assume everyone is under 55 just like me for the next 9 months and 21 days!
The move down- $750,000.00 Price – $500,000.00 down – New PITI = $2003.00 – If rates are 1% higher? $2150.00
The sideways move $950,000.00 new house $500,000.00 down = New PITI = $3110.00 – If rates are 1% higher? $3370.00
The move up – $1,150,000.00 Price – $500,000.00 down = New PITI $4308.17 – If rates are 1% higher? $4688.00
Prop 13 may help the first 2 by $150.00 per month and $300 per month respectively. If you don’t know what Prop 13 is then look it up! It is very important for you to know this if you work in Real Estate in California!
One more fun note – If you sell the house above for $950,000.00, then you can take your $500,000.00 tax exemption and move to the new house and get a new tax exemption in 2 years. Hmmm?
Interest rates are still great! We had a dip below these rates yesterday and then they bounced back up! The market is extremely volatile, but rates are still FANTASTIC!! Below are rates as of this moment:
- 30-year fixed conventional 1st Mortgage with 25% down – 3.625% (3.673 APR). Loan amounts up to $484,350.00 = $2208.88
- 15-year fixed conventional 1st Mortgage with 25% – 3.125% (3.210 APR). Loan amounts up to $484,350.00 = $3374.03
- 5/1 ARM 1st Mortgage – 25% down – Fixed for 5 years and then becomes variable – 3.125% – (3.144 APR) Loan amounts up to $3,000,000.00 = $12851.26
- 7/1 ARM 1st Mortgage – 25% Fixed for 7 years and then becomes variable – 3.250% – (3.261 APR) Loan amounts up to $3,000,000.00 = $13,056.19
- 10/1 ARM 1st Mortgage – 25% Fixed for 10 years and then becomes variable – 3.375% – (3.385 APR) Loan amounts up to $3,000.,000.00 = $13,262.89
- 30-year fixed 1st Mortgage FHA loan 3.50% down – 3.250% (4.663 APR). Loan amounts up to $484,350.00 = $2144.81 + $349.08 PMI = $2493.89
- 30-year fixed 1st Mortgage VA loan 0% – 3.250% (3.296 APR). Loan amounts up to $484,350.00 = $2107.92
- 30 Year Fixed rate 1st Mortgage Jumbo Loan 25% down – 4.125% (4.145 APR). loan amounts up to $3,000,000.00 =14,539.49
I will be in the office the rest of the week and in and out on the weekend! Last night I was here only here until 8:24 and I left my handy teammate Dwayne here all alone! My office line is 661-260-2970 and my cell is 661-714-6258. We are never to busy to help you or your clients! I hope to hear from you soon.