If you know nothing else about how financing works, you know a lower mortgage rate is better than a higher one. You don’t need to be an expert to have figured that out. But calculating exactly how a low mortgage rate affects how much house you can afford is a little more complicated. After all, there a lot of moving parts. One recent analysis might help.
Buying Power Increases with Low Mortgage Rates
The report looked at how much purchasing power home buyers have gained over the past year – since mortgage rates have dropped by almost a full point during that time. The results help explain why buyer demand is so high right now. They also help illustrate just how much more house you can afford with rates near record lows. So how much is it? Well, according to the numbers, a home buyer with a monthly budget of $2,500 can afford a home $33,250 more expensive than what they could buy last year at the same time. That’s a nearly 7 percent increase year-over-year. Put another way, that buyer, in August 2019, could afford a $483,250 house. Now, they could comfortably buy a $516,500 house. That’s a significant upgrade and good news for hopeful home buyers looking to make a move as the summer winds down. Click on the link for more information (source).
Here at A1 Mortgage, we know how important it is to choose the right house for you and your companion. We have the responsibility to provide you with the best products and the highest level of customer service possible. With hundreds of loan programs available, we tailor a loan specific to your mortgage needs. Get pre-approved and start shopping for your dream home by clicking here!