When you’re buying a home, you might think the price you offer is ultimately the price you’ll pay, but if you’re buying a home with a mortgage, that’s not the case. With a mortgage, in addition to paying your principal (the amount of money the bank loans you to purchase your home), you’ll also pay interest on that principal—which is why the interest rate on your loan is so important.
Interest rates on mortgages have been low in recent years, but they’re steadily rising. And even a minor increase in an interest rate can cost you big over the course of your mortgage. According to a recent article from Realtor.com, thanks to forecasted hikes to the Federal Reserve Key Interest Rate(which directly impacts interest rates on mortgages), mortgage interest rates are expected to continue increasing for the foreseeable future.
As the article demonstrates, even a small increase in your mortgage interest rate can spell major changes in your monthly payment. For example, if interest rates for a 30-year, fixed-rate mortgage increase by one percentage point from the current rate of 4.65%, you’ll pay a whopping $53,000 more over the course of your loan than you would pay if you purchased today.
The Takeaway
If you’ve been thinking about purchasing a home, do yourself a favor and make a move now before interest rates go any higher—and save yourself a ton of cash in the process.
WANT TO FIND THE HOME OF YOUR DREAMS?
How about doing even better than that and buying it at the best price possible?
Then you should download your free copy of my booklet “The Ultimate Home Buyer’s Guide”.
Most people think finding the home of their dreams just sort of happens…
Like they’ll “know it when they see it,” or it’ll be love at first site. Sometimes that happens. But a lot of times, homebuyers miss out on great homes because they make some really common mistakes.
Finding and actually getting the best house for your wants and needs (let alone at the best possible price!) isn’t as simple as just being in the market, finding it, putting it in a shopping cart, and heading to the checkout.
There’s quite a bit to the process.
My buyer’s guide will demystify the process and give you a no-fluff, in-between-the-lines look at things most buyers either simply ignore, or don’t realize. (Even some agents don’t know some of the things I cover in this booklet.) Get it here.
