As you might remember from my earlier posts about house hunting for the perfect property, I’m itching to homestead. After casting about the local waters, we found the perfect place, for probably about $230,00, which is entirely not affordable for us, without a low-cost loan.
Since our bank of choice could only offer us a rate of 6.5%, at which our monthly payments would really put our pennies in quite a pinch, I applied to an online company promising up to five loan offers from competing banks. The best offer, at 5.7%, brought the potential monthly payments down a few hundred dollars, but still way not enough.
In hopes that what my email-happy contact person wrote was true, namely that “the initial offers that you received are not the only offers you qualify for, and there could be loan offers that better fit your situation for lower closing costs,” and that his company wants “to make sure every customer receives 100% customer service and satisfaction,” I replied to him: “I’m afraid we are unable to pursue purchasing a new home at this point…unless you know of a way to get a fixed-rate, 30-year, $230,000 mortgage with monthly payments under $800.”
His response was brief and to the point: “Unfortunately, you would need less than a 2% interest rate to get that. If that is your monthly payment comfort zone, you should be looking to purchase a property around $100,000. Are there any properties around your area at this price?”
Well, no, actually, not ones I’d want.
But his 2% interest figure got me thinking. On March 18, the U.S. Federal Reserve Board lowered its federal funds rate to 2.25%–which would suit me just fine. I emailed a close contact who works for the Board: “Say, what are the odds that the Fed could share the love with us? Home mortgage loans are still up at 5.6%-6.5%, but isn’t the Fed offering loans down at around 2%? I could afford a whole lot more house at that rate! Somehow I’d like to benefit from this recession.”
“I’m on it,” he wrote back. His later conclusion? Become a bank.
One Comment
Second Sister
How to become a bank is the question… I mean, you can be ordained on-line, can you become a bank on-line,too? Are you getting all kinds of “offers” in the mail trying to get you to buy this or that with your refund? My funniest one was one trying to get me to do botox…