Interest rates fell to a historical 40-year low in November 2010 to 4.17% interest rate for a fixed, 30 year loan, after 7-months of continuous declining. Since then, they have been increasing steadily as the fears of inflation and oil price increases moved the markets.

If you are wondering how this affects your pocket, let us take a look at the chart above.

To make the comparison simple, let us assume that based on your excellent FICO score, your present debts, and your current income, you can qualify to purchase a $100,000 home with a 30-year loan, with a 4.5% interest rate. This would make your mortgage payments equal to $506.69 per month.

Now, if the interest rates go up just 1 percent to 5.5%, you will now qualify to buy only a $90,000 home as this new price will now keep your payments below $511.01. Basically, you lost 10% purchasing power just because the interest rate changed 1 percent.

Don't seat on the side too long, this is still a good time to buy a home.

As a By Referral Only®, and C.D.P.E, REALTOR® , I am committed to providing such extraordinary service and expertise that you will gladly refer your friends, family and acquaintances. With your help I am able to build strong business relationships one person at a time.

If you want to know more about this or if you have more questions, please do not hesitate to Email me or contact me at 832-607-0149 for more information that I will be happy to go into more detail.