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BY ANDERS HOSTELLEY – Now is a fantastic time to take advantage of today’s historic low rates by refinancing your existing mortgage, or purchasing a home 30 year fixed rate mortgage rates are at near all time lows, and the 15 year fixed rate set a record low last week.

If you look back in time we have not seen rates this low since the 1960s.

If you are looking to buy a home next year, you should consider this: What if rates are 1 percent higher at that time, and what effect would that have to your mortgage payment?

Let’s say that if you were to purchase a home today for $500,000 with a down payment of  $ 100,000.

This would leave you with a loan amount of $ 400,000 and at today’s rate of 4.50% (APR 4.674%) your principal and interest payment would be $2,026.75.  Now if you were to wait to purchase next year and rates move up by 1%, which is very likely, the rate would be 5.50%.

Based on this rate, your principal and interest payment would be $ 2,271.15.

This means your monthly mortgage payment would be $244 less if you purchased now instead of next year.

In my example, I used the same purchase price and loan amount if you were to purchase today, instead of next year. But what happens if prices increase next year, which seems very likely based on the most recent Honolulu Board of Realtor housing statistics? The time to act is now.

Guest editorial by Anders Hostelley, EVP Loan Origination, Home Loan Manager, Honolulu HomeLoans, Inc. Reach him at (681-7500) or ahostelley@honhl.com

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