How Interest Rates Affect the Bottom Line!

December1

Did you know that a ½% change in interest is approximately equal to a 5% change in sales price? It’s powerful to realize the importance of the relationship of interest rates to your monthly payments.  This is the reason why our present low interest rates are so important!!  When I started my real estate professional life, interest rates were at 13% and when they dropped below 10%, we thought we’d just won the lottery!!!  So, our historic low interest rates coupled with the present market reality of decreased pricing is a serious reason to consider real estate as an investment!!!

Change in Interest vs. Reduced Sales Price

Purchase Price 

 $200,000

Interest Rate 

 5%

Term 

 30

Payment 

 $1,073.64
           

½% Increase in Rate 

 $1,135.58

5% Increase in Price 

 $1,127.33

A ½% change in interest rates is approximately equal to 5% change in price

 

1% Increase in Rate 

 $1,199.10

10% Increase in Price 

 $1,181.01

A 1% change in interest rates is approximately equal to 10% change in price

About the Author | Janeese Jackson

My job is service...service to you and your real estate transactions! How can you benefit from my 20 years of experience and expertise? What can I offer to make the process more productive? * Current information on available housing...comparative and competitive market pricing and analysis * Daily involvement in the local real estate marketplace * Thorough, comprehensive knowledge reflecting years of helping others complete their real estate business * Extensive network of professional resources to make the process as smooth as possible My commitment is to you! Being available to you...returning your calls...answering your questions...addressing your concerns...respecting your money...matching your timeline...meeting your expectations...helping accomplish your real estate goals!!

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