Monday December 5, 2016
Homebuyers have been enjoying low interest rates for quite some time but that is all expected to change in the coming months. Interest rates have risen in the weeks following the presidential election and they are expected to continue to go up.
With the interest rate increase, if you’re in the market for a new home now is the time to buy because waiting could cost you. Interest rates are still low enough that potential homebuyers will score a great a deal on their home if they buy soon. Unfortunately, as interest rates rise, homebuyers will lose their buying power meaning they will get less home for their money or spend much more for the home they want.
You wouldn’t think a small increase like .25 percent could dramatically impact your purchase but when it comes to mortgages even the slightest increase will make a big difference and cost you thousands.
$300,000 home + 4.125% = $523,422 total mortgage
$300,000 home + 4.375% = $539,228 total mortgage
$15,806 difference with just a .25% increase
As interest rates rise, it doesn’t mean homeowners should hold off on buying a home because it’s always an unknown as to when they will drop. Plus, owning a home is an excellent long-term investment. Homebuyers just need to be aware that with rising interest rates, buyers will be able to afford less.
So, if you’ve had your eye on a new home or you’re looking to become a first-time homebuyer, don’t wait much longer. When you meet with a mortgage lender you lock into the current interest rate for the next several weeks. You can look at the latest interest rates here and use our mortgage calculator to estimate the costs.
If you have any questions about what you can afford, how to get the best deal or lock into a low interest rate, call the experts at Spinell Homes (907) 344-5678. We’ve been helping homeowners get the keys to their dream home for 30 years and will help you get the best deal.