In spite of the new mortgage qualification rules, now is an excellent time to get into the real estate market! WHY???
When it comes to the mortgage side of things, rates are at an all time low. Currently, we can get a 5 year fixed term rate of 2.34%. If we look at a $400,000 mortgage, the very first payment has more money going to the principal than toward interest. The monthly payment would be $1,760.15. $983.93 goes directly to the principal and $776.22 goes toward interest. The amount going toward the principal increases on every payment after that as well. This is incredible! 10 years ago, a 5 year interest rate sat at about 5%. The monthly payment on that would have been $2,326.42 and only $676.85 was applied to the principal on the very first payment and $1,649.57 went toward the interest. With the interest rates available today it is an excellent time to buy!!!!
If you’re waiting for the market to “hit bottom”, you may be doing yourself a disservice, because you will gain more by having a better rate than you will by saving a few thousand dollars on your purchase.
Rates are going to start going up. TD has already raised theirs, so if you want to take advantage of today’s great rates, now is the time to get into the market!
Please feel free to call us or email us if you have any questions about today’s real estate market or would like us to put you in touch with a mortgage broker who can answer your financial questions.