Monday, June 18, 2018 / by Veenstra Team
Kalamazoo MI Real Estate: An economist responded when asked how interest rates would change: “They may fall some and then, rise and after that, they’ll fluctuate.”
Just because interest rates have been low for ten years doesn’t mean they are supposed to be low or will stay low. The Federal Reserve has raised interest rates twice this year and are expected to go up twice more plus three times next year. Mortgage rates have risen from 3.95% to 4.62% since the first of January.
Increased rates directly affect the payments on homes but so does the price. With inventory levels remaining low, the prices will continue to go up. When interest rates and prices rise at the same time, it costs buyers a lot more.
If the mortgage rates go up by one percent and prices increase by five percent in the next year, the payment on a $250,000 home could go up by $200 a month. In a seven-year period, the buyer would pay $18,000 more for the home.
People planning to buy a home, need to investigate the possibilities of accelerating their timetable to take advantage of lower rates and prices. Use the Cost of Waiting to Buy calculator to see how much more it could cost you to wait. Call Profile.BusinessPhone} if you have questions about what can be done now.
We have talked to some people that tell us that they are waiting to improve their credit score before they consider buying. Though it is often true that a higher credit score will qualify you for a lower interest rate, it is often true that waiting to purchase will mean you will pay more for the house because of rising values AND interest rates may also go up while you are waiting. If you are already qualified to purchase but are waiting for a higher credit score to get you a better rate you may be taking a high risk by waiting. Your personal situation needs to be carefully considered and it is likely that you need to have professional help to carefully consider.
Owning a home has historically proven to be a huge factor for wealth acquisition. Call us and we will give you the name of a trusted lender who can provide you with important information for making wise decisions. Contact the Veenstra Team (at 269-350-5514) and we will be able to guide you through the home buying process so that you can determine best timing for your home purchase decisions. The lender and we do not charge for this guidance! Looking forward to talking to you soon!