Right now we're enjoying a period of historically low mortgage interest rates. It's no secret that they will be going up; the big question is when will they go up. And if they do, what does this exactly mean for you and your dream home?
Let's say you have your eye on purchasing a home priced at $250,000. However, instead on jumping on the chance to buy your dream home, you bide your time in hopes that mortgage interest rates decline further. But they don't and a .25% interest rate increase happens instead.
This .25% increase now means you need to earn an additional 3% in income to qualify for your $250,000 dream home. You're also now looking at paying additional interest around $9,500 or more during the course of your loan. It's either that or you now go looking for houses priced 3% less than the $250,000 dream home you've wanted. Now just imagine how much your purchasing power decreases if rates go up 1 percent or higher!
If you value the purchasing power you have today, the best decision you can make is to jump off the fence and buy now, most especially if your dream home is on the market right now!
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The Mortgage Reports