How Much Buying Power Do Buyers Have?
If you’ve been thinking about buying a home, now is the time to get off the fence.
With interest rates as low as they are, I don’t think buyers will ever have as much purchasing power as they do now. This means that if you’ve been thinking about buying a home, now is the time to get off the fence.
I’ll outline an example to show you what I mean. Let’s say a buyer (we’ll call him “Steve”) is purchasing a home for $250,000 at an interest rate of 4%. If you take into account the principal, interest, taxes, and insurance components of his mortgage, Steve’s monthly payment would be roughly $1,193. To put that into perspective, most two-bedroom/one-bathroom apartments are renting for $1,200 a month.
“Don’t let this buying power slip through your fingers.”
What if Steve buys that same house for the same price, except this time at a rate of 3.5%? In that case, his monthly payment would drop to $1,122. If he buys at a rate of 3%, his monthly payments drops further to $1,051.
What’s interesting is that once the rate drops from 4% to 3.5%, and if you have the budget to still pay $1,193, you can add $15,000 to your buying power. In other words, you’d be able to buy a $265,000 house. Once it drops to 3%, you can add $30,000 to your buying power if you can afford to pay $1,193 per month. The cool thing is, if you don’t want to buy a $280,000 house, you can stick with the $250,000 home at 3% for just $1,051, which is almost unheard of in this day and age.
If you have questions about today’s topic or would like to get in touch with a great loan officer, don’t hesitate to reach out to me. I’d love to help you.
About Todd Martin

I have been in real estate for over 20 years. After owning an international real estate franchise for several years I realized that I could take better care of my clients and customers at the local level. With past experience in corporate america combined with 26yrs of service in the military (Navy, Army and Air Force) this seemed like the right move. I decided to open my real estate company and base the company on the highest level of customer service possible.
Over the years I have discovered that real estate is more than business. it is about life, whether you are starting out, moving up or simply settling down everyone I have ever had the pleasure of working with is in a different place in life. I understand and strive to make each experience unique and as meaningful as possible.
Todd Martin
Amped Property Group
Call It Closed International Realty
3418 Frankfort Ave Suite 265
Louisville, KY 40207
502.200.1980
[email protected]
https://www.ampedpg.com