I had previously convinced myself that purchasing a home now would be a bad decision. We have a pile of student loans and a large down-payment to take care of first. But with the Fed cutting interest rates once again, mortgage rates have fallen to extreme lows. (Check out what Jim @ Blueprint For Financial Prosperity has to say about the recent rate cut.)
In this series' first post, I discovered I could take out a $133,528.50 30-year fixed mortgage or a $95,468.44 15-year fixed mortgage while keeping my monthly payment at an affordable $775.00:
But with lenders now offering interest rates as low as 4.75% on a 30-year fixed and 4.875% on a 15-year fixed, my $775.00 mortgage payment could travel a bit further:
It appears as though my $775.00 could buy me $15,000 more in house today on a 30-year fixed loan than just one week ago. Will rates still be this low a year or two from now when I previously thought I would be ready to buy? I doubt it. But, these low rates are probably assuming a 20% down-payment. While we could come up with this cash in a couple of months, it would require us to liquidate the emergency fund. And with the student loan debt, I'm not sure my debt payment ratio would justify this low rate.
Regardless, these low rates are definitely enticing. I would love to hear your thoughts and advice!
Click here to read the first post in this series, "First Time Home Buyer Series – Where to Begin?"
