How The Increase In Interest Rates Will Affect You

Dated: 12/14/2017

Views: 362

Here is how the interest rate increase affects you. Say you are approved for $100,000 but you are on the fence about a house maybe you’re waiting on a price reduction. 1/4 increase in interest rates is the equivalent to about $4000 of buying power. So now instead of being approved for $100,000 you are only approved for $96,000.


$100,000-purchase price

$4,500- seller paid closing costs and prepaids

_________________________________________________

$95,500- seller net (there are other fees paid buy the seller but for educational purposes we will keep it simple)


Any seller should accept this offer


Now 1/4 interest rate increase (See below)


$100,000-asking price

$96,000-offer (because that is all you are approved for now)

$4500-seller paid closing costs and prepaids

_________________________________________________

$91,500-seller net (again there are other fees see above)


 Most sellers will reject this offer. Its simply way too low. Even if the seller counters you have no where to go because you are maxed out at $96,000. 


I hope that this helps explain everything if you have any questions feel free to call or text me

270-256-3501

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