9/25/2012

Best Time Ever to Save on a Mortgage Payment in Southern California

US 30 Year Mortgage Rate Chart
30-year mortgage rates since Sept. 2007
Dear Buyers:

Did you know rates are about 3.49% right now? Best time ever to save on a new mortgage payment in the Long Beach, California area!

Rates have trended downward since 2008, and that means you will pay less on your monthly mortgage payment for the same selling price. 

See what your monthly median payment will be at different interest rates and different selling prices.

The lower chart was made up when interest rates were a little higher, but get out your calculator to easily compute a selling price at a lower rate as follows:
Median Monthly Mortgage Payment
Comparisons at higher rates/higher prices
For a home priced at $400,000, with a 20 percent downpayment and a 4 percent mortgage rate, the monthly PITI (principal, interest, insurance and taxes) will be $1,990 for the homebuyer. The monthly PITI jumps to $2,180 at 5 percent and to $2,380 at 6 percent. For each one percentage point increase in the mortgage rate, the payment goes up by almost $200 under these assumptions. Even for a lower priced home at $200,000, the difference in the monthly payment is significant as each percentage point rise in the mortgage rate tacks on $100 to the monthly PITI.  So, for a $400,000 home at today's 3.49 percent mortgage rate, the monthly PITI would be about $1885, and a savings of over $100 at a 4 percent rate.

Pulsenomics, in its latest quarterly survey shows housing prices for the future.
Price appreciation/depreciation expected over the next five years:

2012: -.4%
2013: +1.3%
2014: +2.6%
2015: +3.2%
2016: +3.5%

The average pre-bubble (1987-1999) annual appreciation was 3.6%.
(Thanks to KCM Blog for Pulsenomics data.)



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