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 ho ...
Monday, September 26, 2016 / by David Veenstra
Kalamazoo Real Estate - So we are pretty certain that it’s not “if” the mortgage rate goes up but “when” the rate goes up and a rising mortgage rate will make a big difference for greater Kalamazoo/Portage buyers. Freddie Mac predicts that mortgage rates will be at 4.5% a year from now.
If buyers can afford a home with higher interest rates, it means higher payments. Higher payments might mean they won’t have the money to spend on other things like furniture or improvements to the home or an unrelated purchase like a new car.
GREAT RULE OF THUMB TO REMEMBER FOR MORTGAGE RATE INCREASES
When the rate moves 0.50% on a $250,000, the payment goes up by $70.66 a month. If it moves 1.00%, the payment goes up by $143.74 per month, each and every month for the entire term of the mortgage which means paying over $50,000 more for the house.
The question facing every borrower in this situation is “How will you feel about having to pay more to live ...