While the path to home ownership is slightly different for everyone, there are some factors that will almost always play a part in what you pay for your next home. One of the biggest is your mortgage, and with it, your mortgage rate.
For many, timing is the most important factor in getting a good mortgage rate; that’s one reason why it’s so important to know where those rates are headed in the near future.
As of early November, the rate for a 30-year fixed mortgage sat around 3.95%. But by the middle of 2016, that number may be as high as 4.6%.
And though that may not sound like much, when it comes to mortgage rates, any increase, however small, can have a major impact on your checkbook. Interest rates directly influence the size of your monthly mortgage payments – the higher the interest rate, the more you pay with every installment. Over time, this can have a huge effect on your bank account – and your ability to accumulate wealth through home ownership.
Currently, experts are predicting that interest rates are going to increase steadily over the rest of this year and well in to the next.
Take a look at this chart, based on Freddie Mac’s October 2015 U.S. Economic & Housing Marketing Outlook:
What does this mean for you?
Increased interest rates mean higher monthly mortgage payments. And at the same time that mortgage rates are rising, home values are already up and are expected to be even higher by next year by as much as 4.7%, according to some predictions.
All of these things factors taken together mean that families and individuals can expect to pay more when buying their next property. Additionally, the longer you wait, the higher your payments may be.
If securing a prime interest rate is an important part of your plan for home ownership, now may be the right time to buy, before mortgage rates and home prices continue to rise.
Do you have any more questions about mortgage rates or home ownership? We’re here to help! Get in touch and we’ll work together to find the home, the team, and the mortgage that are perfect for you.
