**How do Interest Rates and Home Prices Really affect you?**

Buying a home at the lowest price and interest rate is always best. But how much does it really impact you. Lets look at some examples. 1.) Lets say rates stayed the same for the next 12 months and home prices went up 10%. Then given a home today costs $200,000 then in 12 months, it would cost $220,000. For example purposes, lets say rates are 3.25% and fixed for 30 years. Then buying a home today for $200,000 you would have a principal and interest payment of $870.41, over 30 years that would total $313,348. If you bought in 12 months and the same home cost $220,000 then you would have a principal and interest payment of $957.45, over 30 years that would total $344.683. A difference of $87.04 a month or $31,335 over 30 years. 2.) If the prices stayed the same and rates changed from 3.25% to 4.25%, then a home purchased today at $200,000 with a rate of 3.25% would have a principal and interest payment of $870.41, over 30 years that would total $313,348. But a home purchased for $200,000 with a rate of 4.25% would have a principal and interest payment of $983.88, over 30 years that would total $354,197. A difference of $113.47 a month or $40,849 over 30 years. 3) One more example, if prices go up 10% and rates went from 3.25% to 4.25%. Then a home purchased for $200,000 with a 3.25% you would have a principal and interest payment of $870.41, over 30 years that would total $313,348. If you the rates and prices increased, the purchasing a home for $220,000 with a rate of 4.25% you would have a principal and interest payment of $1082.27, over 30 years that would total $389,616. That's a difference of $211.86 a month or $76,268 over 30 years. Increasing interest rates and home prices can add up quick. If you feel home prices are going up and rates can't stay low forever, then now may be a good time to buy a home. Just make sure the decision is right for you and your family. |

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