Which is better? A lower price or a higher rate?
If home prices decline by 3 percent, the monthly PITI payment of a median-priced home in California in May, would decline to $1,492 from $1,538, a savings of $46.  However, if mortgages rise by 0.5 percent to 5.14 percent (the average rate for a 30-year fixed mortgage in May), the monthly payment would increase to $1,560, $68 more than the PITI for the lower-priced home.
In the long-run, current mortgage rates can save you money
The bottom line is that minor price fluctuations have only a minor impact on the monthly payment, while even small changes in mortgage rates can make a big difference when calculating the monthly payment.
Click here to get loan information before the rates go up. To get started on viewing homes, condos, investment properties, pre-foreclosures, bank owned foreclosures (REO’s) or thinking of selling your property, please contact me today for free counseling at (619) 301-0200 .
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