If you’ve been on the fence about buying a home, now is the time to make that purchase. With rates recently climbing, we are faced with an uncertain real estate market. Several economists are suggesting that interest rates will rise three more times in 2017. Homebuyers who may have been shopping around previously are surely regretting not locking in their rate at the time.
How do the rising interest rates affect you? Even a slight increase can affect your monthly payment and add up over the long run. As interest rates rise so do home prices, so you’d be getting more bang for your buck buying in today’s market versus a year from now. Essentially, you will be paying more for the same exact house. For example, a 30-year loan will have a higher monthly payment at 5 percent than one at 4 percent because of the additional interest in each payment. So, all else being equal, such as your credit score, rising rates make it more expensive to borrow money.
Something to keep in mind is that even with the recent increase, this doesn’t mean that today’s mortgage rates are terrible. The housing economy is still is great shape and home values are increasing, which is great news for all of us. In fact – the rates we are seeing are still very attractive, relatively low rates. NOW is the time to take advantage of this. Don’t miss your opportunity to afford the house you want!
Blog post by Sean Foley, Pike Creek Mortgage Services, Inc.: sean.pikecreekloans.co