Uncle Sam is on your side when you purchase a house. 1986 version.

By
Real Estate Agent with RE/MAX Advantage

Most of you can't remember interest at the low rate of 12.5%.  Let's review this ad placed in a Homes for Living magazine in 1986.

Uncle Sam is on your side

Let's figure.  A $54,000 loan today at 5% would give you a payment of $289.88.  That's quite a savings.

For the payment of $562.82 you could purchase a $104,843 loan! 

And that's about what a $54,000 house would cost now! 

And the interest rates climbed on and on up!  By the end of the 80's they were around 17% or more. 

Let's figure.  A $54000 loan at 17% would be $769.86.  YIKES!!!

I'm tired and don't want to play this game anymore!  But aren't we pretty fortunate today to have such low interest rates?

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  1. Wanda Thomas 07/07/2010 09:52 PM
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high interest rates
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barbara s duncan
searcy ar
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Rainmaker
616,185
James Quarello
Connecticut Home Inspector
JRV Home Inspection Services, LLC

A good number of first time buyers were much to young or may not have even been born yet to remember interest rates that high. It's hard to make folks realize how good things are now for buying a home, especially when the media is telling everyone the economy is bad.

July 11, 2010 08:59 AM
Rainmaker
698,211
Barbara S. Duncan
CRS, GRI, e-PRO, Searcy AR
RE/MAX Advantage

Elizabeth, you're right.  I remember an ex-banker real estate guy saying in the 80's that we'd have 7% interest before too long.  I looked at him like he was nuts.  Unfortunately, he has died and didn't see these under 5% rates.

Nutsy, I did that math so good, didn't I.  But as you can see with superious branes like me and you have I got a little tired.  My battry run down and I had to quit.

Kate, the adjustable helped one guy.  His interest rate went down with no money spent.  Others with the fixed rates were refinancing like crazy.  And my godson does not do meth, only math.

James, you're too young to remember them too.  LOL   Thanks for stopping by.

July 11, 2010 09:18 AM
Rainmaker
162,395
Kate Ford
Ask Kate a mortgage question...
Get-Your-Best-Mortgage-Rate.com

Well, Ms Barbara, then he doesn't spell very well. Couldn't you help out with that being a teacher AND the godmama.

July 11, 2010 06:45 PM
Rainmaker
698,211
Barbara S. Duncan
CRS, GRI, e-PRO, Searcy AR
RE/MAX Advantage

Kate, it was just a minor typing error.  His little fingers and his active mind sometime work so fast that he makes a tiny mistake.  Don't hold it against him.

July 11, 2010 09:07 PM
Rainmaker
1,172,511
Steven L. Smith
Bellingham WA Home Inspector
King of the House Home Inspection, Inc

Barbara,

The one thing we forget about sometimes, even with interest low, is how much the payment might be compared to years back. When I bought my house in late 70's the interest rate was up around nine percent. The house was 27,500. payment was around 700 a month. Yet, even at low interest rates, if the place is valued up around 300K today, then that payment is still way higher for young folks low interest or not. Even with prices going down some here, it is not back to 27,500.

July 15, 2010 11:04 AM
Anonymous
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Rainmaker
698,211

Barbara S. Duncan

CRS, GRI, e-PRO, Searcy AR
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