Take a $300,000 loan with 30 year fixed loan.  Monthly mortgage payments with an interest rate of 5.25% (interest in April 2010)  would be $1,649.40/month (principal and interest).   The same mortgage amount of $300,000 with current interest rate of 4.375% produces a monthly payment of $1,492.42 (principal & interest).  A difference of $156.98 a month which translates to $1,883.76 a year.  Based on the National Association of Realtor’s statistics – most homeowners stay in a home for 5 to 7 years.  In just 5 years – a buyer would save $9,418.80.  $1,418 MORE than the $8,000 tax credit.  If you were to stay in your house for 30 years – it would be a savings of $56,512,80.  Now that’s 56,512 reasons to buy with the current low interest rates.

HISTORICAL INTEREST RATES FOR LAST 18 MONTHS

The Energy Star website  has details on the qualifying improvements and upgrades and explains how the tax works.  Check it out.  You still have 5 months to complete the work.  The deadline is 12.31.2010.

If you’re in the market for a home and are prepared for a unique transaction, a distressed property can be a great option. Here’s why:

Prices are low – Buying a foreclosed property is an excellent way to get a home for less. Research shows you can save 10-40 percent over the price of similar properties in a traditional sale.

Mortgage costs are low – With rates hovering near historic lows, financing costs to are favorable. Keep in mind, rates are always changing. It’s important to begin the pre-approval process so that you know how much you can realistically afford.

As of today June 2, 2010 - 30 year fixed interest rates are 4.625% (conforming loans), 4.5% for FHA and 5.625% for jumbo loans.  Interest Rates are courtesy of SunTrust, Laura Joines.

You have options – The number of homes in some stage of the foreclosure process still remains high. RealtyTrac, a site dedicated to tracking foreclosures across the country, estimates that there are approximately 2.1 million homes in some stage of foreclosure in the United States.

Sellers and lenders are motivated – According to data from RealtyTrac, in April, one in every 387 households in the country has received a foreclosure filing. The bottom line is that many sellers are still feeling the pain of a down economy and are anxious to out get from under a home that is putting stress on their current financial frustrations. While it is still an emotional transaction, these sellers are willing to come down on price or even consider concessions such as helping out on closing costs. Banks holding on to large portfolios of Real Estate Owned (REO) properties want to unload quickly – and price these home to sell.

Your best ally when purchasing a distressed property is an expert. Always have a professional REALTOR® by your side to help you make informative decisions. If you’re interested in learning more about purchasing a distressed property, email me!

Virtual tour for 1516 Howell Mill Road, #15, Atlanta, GA 30318