A lot of stock has been put into Tax Credits to generate home sales and help maintain any equity home owners might still have in their homes.  Simple supply and demand will tell us that if our home buyer pool shrinks prices will drop because there is less demand for homes.  The tax credits have pulled more buyers into the market creating a situation where home values could be maintained.   If you work the math (I’m not going to do it) you’ll see that a low interest rates will save many times more money than $8000.00 dollars over the life of the loan. 

If you’re a first time buyer and have missed the tax credit it’s not that big of a deal.  Rates are even a touch lower now than they were when the credit was in full swing.  This situation should be capitalized upon for two reasons.  Low interest rates reduce payments and increase buying power.  If you look at the big picture you’ll see that a low interest rate will also put you in a fantastic position as inflation and potentially hyperinflation takes place over the next few years.  A FIXED low rate could be a fantastic asset as interest rates soar, and they will at some point (at least I think they will). 

 

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