What is the effect on total cost if mortgage interest rates increase or decrease by 1%?

I thought it might be helpful to illustrate the difference between a 4.5% and a 5.5% interest rate. This is a question that is frequently asked when discussing financing. For the sake of example, let’s use a 150,000 mortgage with a 30 year term. The principle and interest payment for the 4.5% loan will be 760.02 per month and the 5.5% loan will be $851.68 per month. This is a difference of $91.66 monthly.

It’s staggering when you do the long term math. If you pay or save an extra $91.66 per month for 360 months, that turns into an additional $32,997.60 over the life of the loan.

Costly Seller Mistakes Part 4

Failing to make sure the buyer can afford the house

Any offer you receive should specify that the buyer has been pre-approved for a mortgage big enough to purchase your home. Transactions often fall through because of financing problems. “I don’t care if (a buyer) offers $100,000 above your asking price. If they can’t get a loan or afford it, the offer is meaningless,” says Endres-Fein.

Being inaccessible

Agents love to show homes that are easy to get into. So make it easy for buyers to arrange to see your home. “If I need to call you numerous times just to get a buyer in your house, it won’t get shown or sold,” says Nelson. Leave a lockbox with a key at your door so the buyer’s agent can get in when you’re not home.

Costly Seller Mistakes #3

3. False advertising

Don’t misrepresent your house—either through your description or by retouching photos to the extent that it’s misleading—and don’t let your agent either. Altering a photo to add shrubbery to the front yard or making the neighbor’s house look farther away than it really is won’t fool anyone. Similarly, don’t list your three-bedroom house as having four bedrooms by including that additional room in the basement. “Most buyers looking for a four-bedroom want all the bedrooms on the same level,” says Endres-Fein. “That’s one of the things that buyers complain about most.”

4. Be careful about incentives

In the housing market’s headier days, prospective buyers might have been lured by extra perks like offering to pay for a year’s worth of dues at the local golf club or a $1,000 decorator allowance. Now, though, sellers would do better to reduce the asking price by that incentive amount or offer it as a credit towards closing costs.

5. Waiting to fix up the place

If you know a part of the kitchen’s hardwood floor needs to be replaced, do it before the open house. Deducting the cost of such necessary repairs from the asking price will cost you a lot more than just getting the project done yourself.