Will Interest Rates Rise in 2017?
Homebuyers need to stay plugged in to interest rate forecasts for 2017. As a homebuyer you should be asking yourself “Will Interest rates rise in 2017.” If the answer is yes – you need to make your house purchase early in the year to avoid a significantly higher monthly house payment. Or conversely face a significantly lower price home purchase.
Since the election mortgage interest rates have gone up 50 basis points. This is the equivalent to 0.5%. What does this do to house payment? This costs the average home buyer $750 a year in additional interest payments.
At the time of writing the average interest rate on a 30 year fixed loan is about 4.27%. Will interest rates continue to rise – many experts think the answer is yes. Some homebuyers will find themselves priced out of the market place.
There are ways to lower your interest rate. You can shop around for rates. This can have a modest benefit. More effectively you could improve your credit score – and thereby improve the mortgage interest rate for which you will qualify. Pay off loans. Reduce your credit card balance. Don’t make major purchases (car, furniture etc) and in general improve your financial health. Bumping up your credit score by 25 points can result in an improved interest rate by 10 basis points.
Another approach is to look at a hybrid loan that reduces the term of your loan – and results in a better interest rate. See a mortgage loan officer for details.
Another option is to buy less house. If you were considering a home purchase in the $450,000range then possibly cap your home purchase at $400,000. This will substantially lower your payment.
Get of the couch and get going with your house hunt. Call Sally English at 404.229.2995 for more information.