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How cheap is money right now and how much will monthly payments change should rates go up? These are questions on everyone’s mind right now, so today we’ll try to give you an idea of how interest rates affect our market.
Traditionally, interest rates have been in the 8%-16% range. Right now, rates are still floating anywhere from 3.75% to 4.75%, depending on the loan type and the down payment amount. Although rates are currently near all-time lows, most experts are predicting rates to rise over the course of this year.
For a $200,000 loan, if interest rates moved up .25%, your buying power would decrease by $10,000-$20,000, depending on what you’re looking to put down. So, if you are currently in the market for a $200,000 home, a rise of rates of only a quarter of a percent could affect your buying power by $20,000! If rates moved up .50%, you would then only be able to afford a $160,000 home!
Because your ability to afford a home shifts drastically in the event of even a minor interest rate hike, we highly recommend making a home purchase before rates begin to rise!
For real estate assistance of any kind, please don’t hesitate to reach out to us. We would love to hear from you!
Traditionally, interest rates have been in the 8%-16% range. Right now, rates are still floating anywhere from 3.75% to 4.75%, depending on the loan type and the down payment amount. Although rates are currently near all-time lows, most experts are predicting rates to rise over the course of this year.
For a $200,000 loan, if interest rates moved up .25%, your buying power would decrease by $10,000-$20,000, depending on what you’re looking to put down. So, if you are currently in the market for a $200,000 home, a rise of rates of only a quarter of a percent could affect your buying power by $20,000! If rates moved up .50%, you would then only be able to afford a $160,000 home!
Because your ability to afford a home shifts drastically in the event of even a minor interest rate hike, we highly recommend making a home purchase before rates begin to rise!
For real estate assistance of any kind, please don’t hesitate to reach out to us. We would love to hear from you!
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