Thursday, July 9, 2015

Don’t Let Your “Luck” Run Out




The 30-year fixed mortgage interest rate is currently still below 4%. Many buyers may be on the fence as to whether to act now and purchase a new home, or wait until next year, believing they still have time to lock in a low rate.

If you look at what the experts are predicting over the course of the next 12 months, it may make the decision for you.

Predictions for 2016 2Q:
4.2% - Fannie Mae
4.7% - Freddie Mac

Even an increase of half a percentage point can put a dent in your family’s net worth.

Let’s look at it this way…
The monthly payment (principal & interest only) on a $250,000 home today, with the current 3.86% interest rate would be $1,173.

If we take that same home a year later, the Home Price Expectation Survey projects that prices will rise about 4.4% making that home cost $11,000 more at $261,000.

If we take Freddie Mac’s rate projection of 4.7%, the monthly mortgage payment climbs to $1,354.
Some buyers might not think that an extra $181 a month is that bad. But over the course of 30-year mortgage you have spent an additional $65,160 by waiting a year.

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