Monday, December 12, 2016 / by David Veenstra
Kalamazoo real estate: Since the election, interest rates have started going up. Higher interest rates will have a direct effect on the cost that home buyers will pay for housing. There is a rule of thumb that a ½% change in interest is approximately equal to 5% change in price. Stated another way, if the interest rate goes up by ½% the impact on your budget is almost the same as having to pay 5% more on the price of the house. That means the monthly payment for a $250,000 house that you can purchase at today's interest rates would cost you the same as if you are buying that same house for $262,500 once the interest rates go up 5%.
If you wait until interest rates go up, it will cost you more each month to live in the very same home. If you would want to keep your monthly payments about the same you will have to purchase a lower priced home.
To get the most value for your money, it may be the best t ...