Real Estate Beyond Four Walls

The end of 2011 showed that mortgage rates still hover near historic lows.  That makes financing a Maplewood NJ area home even more affordable.  While up only slightly over the previous week (0.04% to be exact), the average interest rate for a 30-year Fixed Rate Mortgage (FRM) was just 3.95%.  This marked almost a full percentage point less than the same time last year (when it ended at an average of 4.86%).  The 15-year FRM was also slightly up from the previous week (0.03%) at 3.24% but was also almost a full percentage point less than the end of 2010 (when it was 4.20%).  In fact, interest rates for Fixed Rate Mortgages were less than 4% for the last nine weeks in a row at the end of 2011 and were only above 5% twice for the entire calendar year.  That's quite impressive. Since your mortgage payment typically goes towards the principal, interest, PMI (if you put less than 20% down) and taxes (if you divide it up into 12 payments and include it in your monthly payment instead of having to come up with it all at one time during the year), the interest rate on your loan can have a significant impact on your monthly payment.  Let's say that you purchase a Maplewood home today for $320,000.  Your credit is good so you qualify for the 3.95% 30-year FRM.  Your monthly mortgage would be $1518.52.  However, the same loan exactly one year ago would have cost you $1690.55 per month.  That's a savings of approximately $2064 over the course of one year.  That's a lot of money! These interest rates will not stay so low forever.  Home prices in the Maplewood area also remain at affordable levels.  When coupled with the historically low interest rates and the Mortgage Interest Deduction, buying a home is a much more cost-effective way to spend your housing dollars than renting.  Besides the pride of ownership, your monthly payment can actually be less than your rent.  A 30-year FRM will ensure that your mortgage payment never goes up, either.  The same can't be said for rent, which will typically increase when your signed rental agreement is over. Take advantage of the low interest rates now.  They won't remain this low forever.  If one of your resolutions for 2012 is to be the proud owner of an Essex County home, contact me today.  I can help you find exactly what you're looking for now. Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Maplewood is Home real estate blog here: http://maplewoodishome.com/2012/01/interest-rates-still-near-historic-lows/.