With mortgage rates down to all-time lows, you can buy a lot more home for your money. Home affordability is at an all-time high. According to last week's Freddie Mac mortgage rate survey, the average 30-year fixed rate mortgage has dropped to 3.62% nationwide. This is down from 4.08% in March, and down from 4.60% from one year ago. Mortgage rates are "on sale". Falling mortgage rates can make one of two changes to the way a Henrico home buyer looks at properties. They can either make a given home's monthly housing payment that much more affordable to a buyer, or they can expand that buyer's home purchasing power to a higher, maximum price point. Since July 2011, that maximum price point increase has been significant. Assuming a principal + interest payment of $1,000 per month and a 30-year loan term, a category that includes 30-year fixed rate mortgages and most adjustable-rate mortgages, here's a maximum loan size comparison of the last 12 months :
- July 2011 : A payment of $1,000 affords a maximum loan size of $197,130
- July 2012 : A payment of $1,000 affords a maximum loan size of $219,409