Financing » The $34,300 Difference

The $34,300-Dollar Difference

Homebuying in 2010 Means More than Tax Credits.

Much of the talk in real estate has been focused on the Federal Tax Credits. Now that the program is over, is it really smart to go ahead and buy a home. Yes, because home prices and interest rates remain at historic lows?   Holmes Homes, the award-winning Utah homebuilder and premier builder in the stunning Daybreak community, can show you why now is perhaps the best time in years to purchase your dream home.


“With builder and financial incentives that go far beyond tax credits, we can help almost anyone see the value of buying now,” says Bart Sharp, Vice President of Sales for Holmes Homes.  “The unfortunate truth is that just as we’re currently seeing at the gas pumps, home prices as well as interest rates are also bound to creep up.”


Rudy Franco, of Republic Mortgage, the preferred lender for Holmes Homes, puts actual numbers to Sharp’s prediction as to the future of interest rates. “Without a doubt, the feel in the market place is that interest rates will move higher sometime in the near future.  Many people don’t truly understand how much a 2 per cent increase in interest rates would affect their ability to purchase a home.”

 

Buying Power


Franco describes this scenario in terms of buying power. “Say some homebuyers wanted an $1100 dollar payment and could lock in a 4.75% (APR is 5.281) interest rate on their loan.  At that rate, they could purchase a $175,000 dollar home.  Now, if interest rates were to increase to 5.75%(APR is 6.312) and the buyers still wanted to keep that same $1100 dollar monthly payment, they could only purchase a $156,000 dollar home.  And then, if interest rates were to climb to 6.75%(APR is 7.345), those same homebuyers, at an $1100 dollar payment could only afford a home costing $140,700.  That’s a drop in buying power of $34,300 dollars with a 2 percentage point increase in interest rates!”


“There is no need for people to struggle with this kind of uncertain future if they just give us a chance to tell our story,” continues Bart Sharp.  “Put the interest rates, low home prices and builder incentives to work for you and increase your buying power.  We have exceptional homes available from the 120s to the mid-300s, and offer thousands of dollars in upgrades, help with closing costs, and other incentives for anyone looking to purchase the perfect home. And at Holmes Homes, that’s what we’re all about – making dreams come true one family at a time.”


Download a list of currently available homes and visit the models in Daybreak.