Historically low mortgage interest rates have benefited homebuyers in a number of ways – from being able to save money on a home purchase to stretching into a bit more home than originally planned for. While the current rates are still very low based on mortgage rate history, they have climbed in recent weeks. This article/video does a good job of illustrating the difference even a small increase can make to a monthly budget – multiply that out annually and over 30 years, and the impact can be dramatic.
“To put it in perspective, on May 1, we were at 3.5% on a 30-year fixed rate,” explained Raedean Born, home mortgage consultant with HomeServices Lending, LLC in Overland Park, Kan. “Thirty-eight business days later, we are a full 1% higher to 4.5%. On a $200,000 loan, that’s a $115 increase in a monthly payment.”
With inventory low, and home prices and rates on the rise, many who were considering buying are deciding it’s time to pull the trigger. If you are in this position, please make sure to take the time to have a conversation with your lender to determine when is the right time for you to lock a rate to ensure you receive the best mortgage for your financial situation!