Interest Rates–going up!

Maybe you heard on the news in the last couple of days that interest rates for a 30-year fixed mortgage have increased–rates are now over 5%.  Now, honestly, that’s still a really low rate, but it’s higher than it was 30 days ago.  And most of the lenders I talk to think it’s going to slowly continue to increase, at least for now.  This takes me back to a reminder from an earlier post–if you’re considering buying a home and you’re able to do so, this would be a good time to get serious about it!

Even if the home you find does not change price in the next 60-90 days (highly unlikely in San Antonio, if it’s still even available after that time!), your cost to purchase it is likely to increase, which might make it more difficult to qualify to buy it in the first place!   Of course, all this depends on your particular situation, but the general wisdom is that many potential homebuyers may be knocked out of the game, or bumped down to a lower price range.  That means their choices are more limited.

What does this mean in real numbers?  Here’s an example:

Let’s say your loan is for $170,000.
Nov  2010–interest rate is 4.17%        P&I (principal & interest) = $828.36/month
Today-  interest rate is 5.05%        P&I =   917.80/month
Difference                                                           $89.44/month

$89.44 per month more out of pocket/month = > $1000 per year = > $32,000 over the 30-year life of the loan!

Do you see what I mean about the cost of buying a home?   If you’re on the fence, time to get off!

If you’re in San Antonio, I would love to help you find a home!  Contact me at [email protected].  If you’re not in San Antonio, I’d be happy to help you find a REALTOR in your area–contact me at the same e-mail.