Commentary By Gail Alm at Fairway Independent Mortgage
One of the things I can always count on when talking with someone about real estate and financing it they will always ask me, “What do you think is going to happen with interest rates?” and “What are the current interest rates?”
There are so many factors in today’s lending world that affect rates it is just incredible. The economy, government intervention, the stock market, it is mind boggling and difficult at best to project what rates may do. What we do know is that we have experienced Low rates that had never been seen before. And that we seem to have moved away from those ridiculously low rates.
And what I will show you is how those rising rates may affect your Purchasing Power! You can see in this chart that a mortgage today for $250,000 versus a mortgage next year for the same amount with an estimated increase to 5.3% in interest rate will cost a borrower $162.80 more per month or almost $2000 per year more for the exact same mortgage amount. That is almost enough for a vacation, every year!
But let’s look at it another way. Let’s say your comfortable monthly payment is $1225.46. At next year’s projected interest rate, your same monthly payment will allow you to get a mortgage of $220,000! That is $30,000 less!
My suggestion is NOW is the time to buy while interest rates are still very low and Homes are still very affordable! The questions about interest rates is not so much about the rate, but about how much it will cost me. -Gail