Current Interest Rates - Real Estate Investing
Interest rates are very important when you looking to buy a home or invest in real estate. Anything that adds to your monthly bills adds to your expense line and therefore lowers your borrowing power. So you have to negotiate everything and get the lowest possible mortgage payment each time you buy a home.
Let's assume you just found a piece of real estate that you want to invest in and you have your favorite bank that you like to go to. Well the interest rate is 5.50% but the bank down the road is offering 5% even.
$200,000 at 5.50% = $1,135.00
$200,000 at 5% = $1,073.00
So that's $62.00 per month added to your monthly bill for no reason. If you're an investor and you repeat that process with 4 homes you will end up with about $250.00 of pointless monthly expenses.
Use a mortgage calculator to figure out those calculations and make sure they're accurate. Not looking for the best interest rate or a current rate will highly affect your borrowing power and hurt your chances of buying the next home.
At the 5% interest rate you can actually get a mortgage for $212,000 which is a different way of looking at it. The interest that you pay the bank on your mortgage is only going to the bank and that's it. The principal is the only part that pays down your mortgage so you need to work on paying that down and it will lower the amount of interest you pay.
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