Juicy Estates: Mortgage Blog

Mortgage Interest Rate Update….Take The Holiday Road

“It’s a long way down the holiday road” is the way that Lindsey Buckingham of Fleetwood Mac fame put it and the holiday road has sent interest rates adrift with very light trading in both the stock and bond markets. 

Last week as the effect of the Feds comments wore off rates ticked up by .125% which may foretell of traders intent to seek higher returns on their investment dollars buy pulling money out of the bond market in favor of stocks…for more on this see my post of December 22nd.

As always “volatility” is the order of the day and trying to time your rate lock for the lowest possible rate may be an exercise in futility.

That being said let’s suppose that you were purchasing a beautiful new home in Coral Gables for $1,250,000 and borrowing $1,00,000 what would the effect of the .125% difference in interest rate be?

Loan Amount of $1,000,000

at 5.875% = monthly payment of $5,915

at 6.00% = monthly payment of $5,995

The difference is only $80 per month and that is before you take into consideration your mortgage interest deduction.  While $80 a month is nothing to sneeze at it will not make a home “unaffordable” for you if you are looking for property of this caliber.  

Managing rate locks in an effort to obtain the lowest mortgage interest rate is something I do everyday for my clients buying luxury homes Coral Gables, Pinecrest, Miami Beach or any South Florida neighborhood.  I would welcome the opportunity to manage your rate lock, even if you are working with another lender.

This entry was posted on Wednesday, December 31st, 2008 at 11:47 am and is filed under Home, Interest Rate Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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