Two things can happen when the mortgage rates go up before you’ve found a home or locked-in your home loan. You may either pay the current mortgage rate which means a higher payment, or you’ve got to increase your down payment to keep the monthly payment at the same level.
If the rate were to go up by ½ %, the payment on a $275, 000 mortgage would increase by $82. 87 per month for the entire 30-year term. That would increase the cost of the home simply by $29, 835.
Some individuals are purchasing the maximum home that they can qualify for. In that case, they cannot qualify for a higher payment and the only way to buy the exact same price home is to put more money down which may not be a possibility. The other option is to buy a lower price home which might not be in the same area or even size which will involve some compromises.
The rate is not the only powerful that affects buyers waiting to purchase. The house they want could sell to somebody else. Costs could increase as new houses come on the market. The question that many buyers request themselves when they become a victim of the consequences of delay is “What could we have spent the money on if we didn’t have to make a higher payment? ”
Home loan rates are very attractive currently and within ½ % of the all time low of 3. 35% in December 2012. The highest rate was 18. 45% in October 1981. Whether you’re purchasing or refinancing, it may not be this low again.
To see how it will affect the payment, connect your numbers into this opens in a new window Cost of Waiting to Buy calculator or call me at (407) 982-7097 and Factors . help you with it.
Oliver and Devinee Overton-Morgan
Morgan Property Solutions
Orlando Property Management
Orlando Property Manager
Property Manager in Orlando
Orlando Real Estate