Purchasing a home is perhaps the largest investment you will ever make. The home buying process is affected by multiple factors and timing is key when making the choice to buy or refinance. Our Melbourne, Florida real estate office is committed to providing you with the ultimate service experience and part of that includes delivering timely information to assist you in making decisions regarding the purchase of your home.
If you have been considering purchasing a new home or even a second home it is a great time to buy. The current interest rate for a 30-year fixed mortgage is currently hovering around 4% but this could be changing very soon. According to a press release put out by the Federal Reserve on June 17, 2015, the economy appears to be on an upswing with improvements in the housing market and overall spending.
Waiting only a few months could impact your monthly payment. Federal Reserve Board Chair Janet Yellen stated, “I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.” According to Bloomberg Fed policy makers in June forecast two quarter-point rate increases this year.
Two one-quarter point rise in the interest rate will increase your monthly payments.
Consider the following example:
|Loan Amount||Interest Rate||Principal + Interest|
Two ¼% hikes will be a difference of $43.91/month, or $526.92/year!
While $43.91 per month may not seem like too much to some it can be the difference in qualifying to purchase a $150,000 house now vs a $160,000 house at a current rate of 4.0%.
If you are renting and have been considering becoming a homeowner give Real Estate Ink a call today to see how much you can save or how much more you can buy now vs later. That same $150,000 house is costing $1200 – $1400 per month in rent right now in this Brevard County housing market. You could be saving $500 plus per month and satisfy the American dream of homeownership. Timing is crucial when it comes to home loans and the clock is ticking away.
An improving economy is great for all of us but a hike in interest rates means higher monthly payments with more money going towards interest over the life of your loan. You can do something about that though! Don’t delay. Call Real Estate Ink today and speak with one of our experts.