When mortgage interest rates rise, you may be tempted to put your home buying plans on hold, but there are three reasons you shouldn’t let higher interest rates deter your home buying plans.
When you shop for rates, shop at least three lenders using the same type of loan – 30-year fixed rate, adjustable, hybrid and so on. Do so at the same time because rates can change as much as several times daily.
- Interest rates fluctuate. Mortgage interest rates rise and fall based on the lender’s viewpoint toward the economic outlook. News that suggests a slowing economy tends to bring rates down, while a rosy manufacturing or jobs report can send them back up.
- You have some control over rates. The rates you see advertised aren’t what you’ll necessarily pay. They vary based upon your credit score, how uch you area able to pay down in cash, and the lenght of your loan.
- Rates are currently a bargain. Between 1972 and 2008, mortgage interest rates averaged about nine percent annually. Today, they’re around four percent. A 1/8th point translates to about $25 or less a month in monthly payments on a conforming loan, or $9,000 over 30 years in tax deductible costs.
If you've been thinking about buying a home and would like to know more about financing, contact Andreas Holder to discuss.
Posted by Andreas Holder on