Sunday, March 18, 2018

Buy Now Before Interest Rates Increase

Interest rates have slowly but steadily increased in the last four years, and that continues to be the trend this year. Interest rates are forecasted to increase in the coming months, which should give you a sense of urgency if you are considering a home purchase in 2018.

With the Spring market just getting underway, more homes will be listed and give buyers the chance to pick up a home before interest rates increase again. The consequences of waiting may mean you must find a smaller home, expand your desired area or look for homes with a smaller price tag.

Interest rate increases can add up substantially over time. Based on an example from Realtor.com, a $300,000 house with a 30-year fixed-rate mortgage and 20 percent down payment, the difference between a 4 percent and 5 percent mortgage rate is $142 a month. If you calculate that over the life of the 30 year loan, that is more than $51,000 extra.

A great option if you know you’ll be buying in the near future is to lock in with a lender. This guarantees the current interest rate for a set period of time. This is especially helpful if you’re looking for a lake home as we are just beginning to see the lake home market wake up. Over the coming weeks, we expect to see an influx of listings.

An interest rate increase is a sign of a healthy market, but for buyers, a lower interest rate is always more appealing. It’s a great time to buy in the Brainerd Lakes Area, and we are happy to discuss your options with you. You can call us at 218-820-7355 or email us at sales@upnorthproperties.com.