For those looking to take out a mortgage in the near future, there’s some bad news. Mortgage rates have been on the rise since the end of the last financial crisis, and now they’ve reached an all-time high.
The average 30-year fixed-rate mortgage has risen above the 4% mark. This has been steadily increasing since the end of 2017 and is now nearly one full percentage point higher than the beginning of the year.
This increase can have a significant impact on prospective homebuyers. It not only means they’ll have to pay a higher interest rate, but also that their monthly payments will be higher than originally anticipated.
The good news is that it’s still possible to lock in a lower interest rate, if you’re willing to pay upfront points. But regardless of the path you choose, purchasing a home is becoming increasingly expensive.
To put it into perspective, a person borrowing $200,000 over 30 years would have seen a payment jump from $954 a month to $987 if they had locked in four weeks ago. That’s a difference of nearly $33 a month.
Homebuyers also have to weigh the fact that mortgage rates are expected to keep climbing. Economists predict the rates will continue to rise throughout the rest of 2018, potentially reaching as high as 5%.
It’s no wonder that people are taking a step back and re-evaluating whether they can afford a mortgage at the current rate. For those who decide they can, it’s important to act quickly; the longer you wait, the higher the mortgage rate and payment will be.
For those who decide the mortgage rates are too high right now, it’s a good idea to continue to save and pay off any other debt you may have so that you’re in the best possible position when the monetary landscape shifts in your favor.
No matter what path you take, understanding the current mortgage landscape and all the implications it has on your budget is essential for successfully buying a home.
For those looking to take out a mortgage in the near future, there’s some bad news. Mortgage rates have been on the rise since the end of the last financial crisis, and now they’ve reached an all-time high.
The average 30-year fixed-rate mortgage has risen above the 4% mark. This has been steadily increasing since the end of 2017 and is now nearly one full percentage point higher than the beginning of the year.
This increase can have a significant impact on prospective homebuyers. It not only means they’ll have to pay a higher interest rate, but also that their monthly payments will be higher than originally anticipated.
The good news is that it’s still possible to lock in a lower interest rate, if you’re willing to pay upfront points. But regardless of the path you choose, purchasing a home is becoming increasingly expensive.
To put it into perspective, a person borrowing $200,000 over 30 years would have seen a payment jump from $954 a month to $987 if they had locked in four weeks ago. That’s a difference of nearly $33 a month.
Homebuyers also have to weigh the fact that mortgage rates are expected to keep climbing. Economists predict the rates will continue to rise throughout the rest of 2018, potentially reaching as high as 5%.
It’s no wonder that people are taking a step back and re-evaluating whether they can afford a mortgage at the current rate. For those who decide they can, it’s important to act quickly; the longer you wait, the higher the mortgage rate and payment will be.
For those who decide the mortgage rates are too high right now, it’s a good idea to continue to save and pay off any other debt you may have so that you’re in the best possible position when the monetary landscape shifts in your favor.
No matter what path you take, understanding the current mortgage landscape and all the implications it has on your budget is essential for successfully buying a home.
