While no one has a crystal ball to predict the rise or fall of housing rates, there are some market indicators that suggest now may be a good time to consider buying or refinancing a home. Even more so if you plan on staying in your home for many years.
Whether you’re buying your first home or ready to refinance, a small rate change can make a big difference. How important is something as little as .5 percentage point increase on a mortgage rate? Consider this. For a 30-year fixed-rate mortgage of $200,000, an interest rate of 4.5 percent, instead of 4.0 percent, would cost roughly $58 more per month. That totals more than $21,000 over the life of the 30-year loan.
During 2015, we expect that mortgage rates will rise throughout the year as the economy continues to recover. There are many reasons for this including relatively low inflation, Federal Reserve monetary policies and other factors.
Not quite ready to buy yet? It is important to keep mortgage rates in perspective. Even though rates have been bouncing up and down a few percentage points over the last few years, there is little question that they remain very low historically. In general, rising interest rates have been an indicator of a healthier economy. When the economy gains strength, home values tend to increase along with interest rates.
The important thing is to buy a home when the time is right for you. You should buy a house when you’re financially ready to do so and your life circumstances dictate it.
If you are looking to discuss your options or get pre-approved, contact one of our mortgage specialists at www.cfcu.org/mortgages or (734) 582-8500. No matter what your mortgage needs, we are here to help you find the perfect home for you!