Sure, the economy isn’t doing so great…it’s getting better…but as we all know I am grading on the curve. Buyers who are worried about the future of their job or their finances shouldn’t buy. However, for those Buyer’s…and there are a lot of them, that have a good feeling of job security and their finances…then here is 1 of many reasons why you shouldn’t sit on the fence.

Interest rates are at HISTORIC lows…I know you have seen this in the headlines before, but they seem to just keep getting lower and I believe that we have reached a point that we are not going to get any lower. At the time I am writing this Blog posting the average 30 years fixed mortgage rate in California, according to zillow.com, is 3.71% and Freddie Mac posted that for the month of November 2011 they were 3.99% .  When I blogged about this in an Aug 22, 2011 post the rate was 4.15%. It is an indisputable FACT that rates will not stay this low forever and “WHEN”…not “IF”…rates go up you borrowing power will go down.

Please allow me to put this into perspective…if a buyer purchases a home that has a principal loan amount (Purchase Price – Down Payment = Principal Loan Amount) of $500,000 at an interest rate of 3.71% their P&I (Principal & Interest) payment will be $2,304.25. “WHEN”…not “IF”…interest rates go up to 4.71% (Only a 1% difference) this same home loan will have a P&I payment of $2,596.19 a difference of $291.95 which will greatly effect a buyer DTI (Debt to Income Ratios) and could cause them to no longer qualify for this loan.

So…the bottom line…if you are feeling good about your job and your finances and you are considering buying a home, you should seriously consider buying now because sooner or later interest rates are going to go up…and the house that you can qualify for and afford today…may not be so affordable tomorrow.