The Time is NOW....
Mortgage rates are still near record lows in comparison to recent history. According to Freddie
Mac's lates Primary Mortgage Market Survey, interest rates for a 30-year fixed mortgage are currently at 4.61%. When I was a mortgage lender pre-recession, we were THRILLED when the rates dropped below 6% for a 30-year fixed! RUMOR HAS IT THAT RATES ARE ON THE RISE!!!!
Those buyers who are on the fence on buying their first home may not understand why this is important. Most buyers understand that the interest rate you get when you purchase your home will impact your monthly payment... but what they fail to understand is that by raising your monthly payment, it also reduces your purchase power.
Your purchasing power is important because it is how much home you can afford (based on your debt-to-income ratios). Here is what you need to know: AS RATES INCREASE, THE PRICE OF THE HOUSE YOU CAN AFFORD TO BUY WILL DECREASE IF YOU PLAN TO STAY WITHIN A CERTAIN MONTHLY HOUSING BUDGET!!!
With each quarter of a percent increase in your interest rate, the value of the home you can afford decreases by 2.5%. That's scary to think about when experts are saying rates will be closer to 5% by this time next year. To add insult to injury, home values are rising by the day due to the increasing demand for housing. With rising rates and rising sales prices, affordability will decline.
If you are considering purchasing a home in the next year, call today to schedule a consultation with one of our agents. The buying process is unique to each buyer, so you need to sit down and discuss your goals and needs. Our specialists can set up a timeline for you and discuss what you need to do first. The beauty of purchasing a house is that you hire a buyer's agent to be on your side and to protect your interests AT NO COST TO YOU!!! Since the seller pays for your buyer's agent's representation of you, there is no reason to go into a purchase without your own advocate!!!
This blog was written by Valerie DeLoach, Owner/Broker-in-Charge of Why Realty Group, an innovative real estate firm specializing in residential properties in Eastern Wake County and all over the Triangle. This boutique firm was conceived and developed by Valerie DeLoach and her husband Joe DeLoach, who together saw a need in the local marketplace for a fresh update on the traditional real estate brokerage. Come see the difference today!