We are all painfully aware that rates have gone up quite a bit . Buyers are asking why and the reasons are many. Right now the fear of inflation has led the Federal Reserve to look towards rate
Mortgage Interest Rates Will Go Up What Does That Mean
We are all painfully aware that rates have gone up quite a bit . Buyers are asking why and the reasons are many. Right now the fear of inflation has led the Federal Reserve to look towards rate increase to control it. And they could go up more.
They are still very good historically, but some clients are understandably worried.
First, how much will rate changes cost, monthly? Here's some examples based on a $350,000 loan:
Rate Monthly P+I
So, the takeaway here is that the $350,000 loan that folks were contemplating is only about $100 to $150/month more now than it was a few months ago. BUT, it could be another $105/month soon if you don't act now.
AND that same house might be more expensive too, in a couple of months.
Here's another way to look at it, if you're maxing out you buying power:
You could borrow $350,000 for $1,620 per month (P+I only) a few months ago. Now, that same monthly payment gets you a $339,500 loan, at 4.500%, not really much difference. But if rates go to 5.000%, then you can only borrow $302,000 . For the same monthly payment. UGH, right? A 1.000% increase in rates reduces the amount that can be borrowed with the same payment by over twelve percent. That's a pretty big difference.
Bottom line: As rates rise, you buying power is diminished. If you're thinking about a change of address, call me today and tell me about your home wants, needs, and goals. I want to be YOUR trusted Real Estate Advisor!
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