With last week’s end to the home buyer tax credits and yesterday’s inexplicable 1000 point slide on the stock market, historians might think it would be a good day to check tall buildings for jumpers.
Of course, every dark economic cloud has a silver lining, right?
Well, maybe not. But this one did. It seems investors fled from the stock market and into Treasury bills, which drove the yield down. The result? Interest rates on 30-year mortgages plummeted.
At one time on Thursday it was actually possible to get a 30-year fixed rate of just 4.5 percent.
Things have settled down in the 24 hours since, but the good news is both FHA and conventional owner occupant interest rates for the weekend settled in at 4.875.
The difference in monthly interest between a rate of 4.875 and 5 percent amounts to about 40 cents per $1000. So, if you purchase a $300,000 duplex, this seemingly small rate difference could actually result in your saving about $120/month, $1440/year or $43,200 over the life of the loan.
That’s reason enough to stay off the building’s ledge, and consider instead, duplex ownership.