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Interest rates have come a long way in the last 30 years!

 


Interest rates have come a long way in the last 30 years!

At the start of the year, housing experts all agreed on one thing: 2017 was going to be the year we would see mortgage interest rates begin to rise. After years of historically low rates, and an improving economy, the question wasn’t if they would increase but instead how much and when they would increase. With some people thinking we could see mortgage interest rates hit 5-5.5% by the end of 2017.

Instead, we have seen the exact opposite happen. According to Freddie Mac, as we head into the middle of 2017 we now have the lowest rates of the year.

What does that mean for you as a Buyer?

The interest rate you secure directly impacts your monthly payment and the amount of house that you can afford if you plan to stay within a certain budget.

If you’re going to buy a home, chances are that you will choose a 30-year, fixed-rate mortgage, most home buyers do. These types of loans have become remarkably affordable, especially since the financial crisis of 2008-2010, with their interest rates currently bottoming out around 3.5 percent.

In general, the change in the Fed’s rate does not have a large, direct impact on long-term mortgage rates. But when the rate does go up, lenders will often find ways of passing on their higher borrowing costs down to consumers.

As a result of long-term mortgage rates being set in stone, they will typically factor in the anticipation of future rate increases. Which may be part of why mortgage rates have increased in recent months, with the Fed suggesting that interest rates are likely to continue to rise.

The average interest rate on a mortgage this month is 4.3 percent, according to Lending Tree, and the average loan on a 30-year, fixed-rate mortgage is worth about $237,000. If the borrowing rate were to rise by a percentage point in the up-coming year, this would mean the monthly payment would rise by $138 per month on the average mortgage — leading to nearly $50,000 in added interest over the life of the loan.

Interest rates are at their lowest in years… RIGHT NOW!

If buying your first home, or moving up to the home of your dreams is in your future, now may be the time to act before interest rates rise.

 

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