Rising Mortgage
Rates- What you need to know
Over the last week, every client I’ve met with has had at
least one thing in common with all of my other clients—they’re all asking about
rates.
If you haven’t seen the news or read the paper over the last
week, you probably heard Ben Bernanke and the Federal Reserve announce on
Wednesday that they will likely begin to reduce the bond purchasing program by
the end of this year. What this means for everyone thinking about purchasing a
home in the next 12 months is this: interest rates will likely be going up.
If you’re reading this and you’re anything like some of the
other folks I’ve sat down with this week, this is a cause for concern.
Although this is not welcomed news, it’s important to keep
this news in perspective. The historical
average for 30 Year home loans is 5.5 percent. With rates currently hovering
around 4 percent we’re still well below the historical average.
For anyone that’s been on the fence about purchasing a new
home, it’d be a good time to sit down and look at the difference in what you’ll
be able to afford if rates continue to rise.
A one-point rise in the interest rate on a $300,000 home
would result in approximately $150 more per month in your monthly payment. What
this means for buyers is that you can purchase a $325,000 home now for the same
monthly payment as a $300,000 home if today’s rates rise a full point.
See the below video for a great recap of these recent events
and as always, feel free to reach out with any questions! - TJ Southmayd Email
