Mortgage Rates Are Inching Up

Mortgage Interest rates could be on the Move - AND the cost of waiting can add up.

 If you are even slightly thinking about buying a new home or for that matter selling your home, Now would be the time to act.  

As the graphic shows, on a $350,000 purchase, with a 3.5% down payment and an Interest rate of 3.625% your monthly payment (P&I) would be $1,540.31.  Now lets say the price of that home was reduced by $20,000 to $332,500, but now the interest rate went up by 1%. Using the same 3.5% down payment, even though the home is $20,000 less, your monthly payment is going up by $106.22!  And finally the 3rd scenario shows the cost of waiting if both the Price goes up (which in many areas is happening), and the Interest Rate goes up.  Now, that home is going to cost you $17,500 more in your price and  your payment is going up by $286.17 (not to mention the cost over the life of the loan which many people don't even look at because they are going to probably sell within 5-7 years) All because you couldn't get off the fence and waited! 

Regardless of what the purchase price is be it $200,000 or $400,000, the cost of waiting is very real if you plan to finance your new home.    And if you are selling your home an Interest Rate increase will affect you as well, as the pool of buyers will be reduced as your home becomes less affordable. So if you are overpriced now...

As a Buyer, now would be the time to sit down with both your Realtor and a Mortgage Lender* to get yourself pre-approved for a mortgage and make your best efforts in finding that new home you've been dreaming about. 

As a Seller, you might want to sit down with your Realtor and review market activity in your area to make sure that your home is competitively priced for today's market.  

Because as you can see, waiting can be costly.

*If you need help with finding a lender, your Realtor should be able to give you the name of several Banks/Mortgage Companies in your area. Remember interest rates vary depending on the type of loan you are applying for as well as other factors.