If you have considered purchasing a home, now is the time to do it. Interest rates are expected to rise.
There are always factors that make us consider when we should buy a home. We ask ourselves if we are getting the best deal, is now the right time for our family, are we ready to make a move? These are all valid questions, and ones we should consider. However, when interest rates go up, invariably your mortgage payment does as well, and that could make a difference in one’s ability to purchase, or the amount they can qualify for.
What we also see is that with rental rates increasing, more people can purchase a home for what they are spending in rent. Those rents are also going to a landlord, rather than in building equity. Another financial benefit for homeowners is through tax deductions. While the majority of a mortgage payment in the early years is spent paying down interest, this expense is tax-deductible. Property tax is also deductible, as well as mortgage insurance and mortgage points, which is a benefit to homeowners.
The current environment of slow but steady economic growth and inflation suggest we will see mortgage interest rates in the 4.5% to 5.5% range….. depending, of course on credit scores, down payment, type of residence and loan to value.
The math is simple; more people with jobs and a more robust economy means more people will be buying and selling homes in a higher interest rate environment. The forecast is that 2017 will deliver a more robust economy, higher interest rates and a more active housing market….plan on it…..here’s how that equates:
$200K @ 4.5% = $1,013 @5.5% = $1,135
$350K @4.5%= $1,773 @5.5%= $1,987
$500K @4.5% = $2,533 @5.5%= $2,838
If you would like me to connect you with a preferred lender, please get in touch and I would be happy to help you.
** (Payment is P&I only)