Here’s a look at how increased rates could affect your home budget.
Mortgage interest rates play a significant role in any home search. This simple example illustrates that point:
If you’re looking at purchasing a $360,000 home with an interest rate of 2.75%, your monthly payment would be $1,470. If that same house is purchased at $360,000 with an interest rate of 3.75%, your monthly payment jumps to $1,667. That’s over $200 more per month and tens of thousands over the life of your loan.
That being said, today’s rates should motivate you to purchase now before they inevitably rise later this year. You’ll want to plan ahead and take rising rates and prices into consideration as part of your budget. You should also be prepared to act when a home that fits your needs pops up. A pre-approval letter will eliminate any delays when submitting an offer. Serious buyers should approach rising rates as a motivating factor to buy sooner because waiting is just going to cost you more, even if prices decrease a bit, which is unlikely.
If you have any questions, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.