Interest Rate Risk - "I want to wait for prices to go down..."

Interesting bit of info from my good friend and mortgage lender Mark Baker at Cardinal Financial...

Did you know a 1% change in interest rate equals 10% LESS in buying power for the same payment? Example:

   4.5% rate, for 30 years at $1,393 PITI = $275,000 Mortgage

    5.5% rate, for 30 years at $1,393 PITI = $245,314 Mortgage (10.79%less)

    6.5% rate, for 30 years at $1,393 PITI = $220,472 Mortgage (19.83% less)

As interest rates increase, Buyer’s qualify for 10% LESS in Purchase Price for every 1% in rate.

If you have a Buyer waiting for prices to "go back down", they might not understand the "Interest Rate Risk".

Mark Baker "The Mortgage Maker" | NMLS ID 274071

Cardinal Financial Company, L.P. | NMLS ID 66247

(702) 451-1040 Officewww.MarkABaker.com