Editorial

The time is right for home buyers

Monday, June 16, 2003

"Sold," "Sale Pending" and "Accepted Offer" signs are starting to pop up around town, giving renewed encouragement to McCook's real estate agents.

Unexpectedly, home sales had been slow in the early months of 2003, perhaps as a result of the unsettled national economy and the after-effects of the severe drought of 2001 and 2002.

But, in the past three weeks, sales have surged, with offers made and accepted on several houses which had been on the market for months.

A number of explanations are offered for the upsurge, but McCook real estate leaders are in agreement that the major change has been in attitudes.

The rains had a lot to do with the turnaround. Looking back on the change in outlook that has taken place in the past few weeks, McCook's realtors said they are amazed, but thankful, at the uplifting effect of the steady string of spring showers.

In a way, the rains served as a wake-up call, giving potential homebuyers the nudge it took to take action. Once they started looking around, the potential buyers discovered there's never been a better time than now to take the plunge.

What makes home-buying so attractive at this time are the interest rates, which are lower now than they have been for 45 years.

As of Friday, the interest rate for a 30-year fixed loans was as low as 5.25 percent, according to Randy Korgan, vice president and real estate lending officer at McCook National Bank.

What's that mean, payment wise? For those who take out a $50,000 loan, a rate of 5.25 percent means that the monthly payment -- covering both principal and interest -- will be $276. That's quite a change from seven years ago -- in 1996 -- when interest rates were running 8.0 percent for a 30-year fixed loan. Back then, at the higher interest level, the principal and interest payment for a 30-year fixed loan of $50,000 would have been $90 higher, or $367 a month.

Over the course of the 30-year loan at the 8 percent rate in 1996, a homebuyer would pay a total of $132,120 over 30 years (360 payments). At today's rate of 5.25 percent, the total of principal and interest for 30 years would drop to $99,360, which would be a savings of more than $32,000 on a $50,000 loan.

Moving up to a $100,000 loan, the payment difference grows even more dramatic for the 30-year term. At 5.25 percent, the monthly payment for principal and interest would be $552, compared to $734 at the 8 percent rate. The savings over 30 years? A whopping $65,520!

Of course, prices for homes are higher than they used to be, but if you can find the right house for your needs, the time is right to lock in a long-term interest rate.

Check the "Homes Guide" and look closely at those homes with "For Sale" signs in the front yard. At long last, your dream home may be within reach financially.

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