Friday, July 5, 2013

How much will rising mortgage rates cost you?

Mortgage rates are rising. An average 30-year fixed rate carried a 3.35% interest rate nine months ago. Today, the same loan will cost you 4.46%.  What does the rise in rates do to a mortgage payment?

Here is a chart of the average mortgage interest rates going back to 1980 to see how much monthly payments would be on a 30-year fixed-rate $250,000 loan. 
Source: Federal Reserve interest rate average for the year

If you take out a $250,000 mortgage with a 30-year, fixed-rate loan today, monthly mortgage payment will be $1,261, up from $1,145 a year ago, and down from $2,200 in 1990 and $3,489 in 1980.

Thank goodness we're probably not going back to 1981 interest rates anytime soon!  We have great rates today, call me to find out what you qualify for  and what your payments will be on the home you would like to purchase.  :)

Wednesday, July 3, 2013

Only 5% of homebuyer's expect rates to drop over the next 12 months

Among the questions asked in the May 2013 Fannie Mae Housing Survey was, "Do you expect mortgage rates to go up, go down, or stay the same in the next 12 months?".

Just 5% of those surveyed expect mortgage rates to drop.

This may be another reason why such a large percentage of respondents said "now is a good time to buy a home". When mortgage rates rise, buyers know, purchasing power wanes.
From today's levels, for every 1 percentage point higher which mortgage rates go, a buyer's maximum purchase price declines 11%.. Rising rates, therefore, can mean the difference between buying a home with 4 bedrooms or three; with 3 bathrooms or two; and with a three-car garage or two.

Rising rates can also mean the difference between buying or renting for another 12 months.
Homeownership is attractive to renters because U.S. homes remain affordable and mortgage rates are still quite low.  Plus, with the high-availability of low-downpayment loans including the Fannie Mae Conventional 97 program and various FHA program, choosing the best mortgage program for your needs is easier than ever.

NEW!

2nd of 10 clever ways to save money on your mortgage!

2. Cut Out the PMI PMI protects the lender in case of loan default If you borrow more than 80% of the value of your home, you normally...

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