Mortgage Rates are going up, how does this affect your Buying Power?

Most of us know that the housing market has been active this past year, with people wanting to buy a house left and right. One of the reasons for this housing market boom is the fact that the interest rates are incredibly low, making it much more appealing for people who want to buy a home because they could save hundreds of dollars every month just on the interest compared to what they would pay if the interest rate was just a point or two higher. But if you’ve been putting off buying a house, you might be wondering if the interest rates are going to drop even more, putting you in the position to save even more money on the interest on the home that you buy. It doesn’t look like it, and here’s why.

Where Interest Rates Have Been and Where They’re Going

In the recent past, interest rates hit an all-time low of 2.27% for a fixed-rate mortgage in January of 2021, but the rates have slightly increased from then until November. Unfortunately, experts are expecting interest rates to continue to rise over the next several months. Over the fourth quarter of 2021, experts expect the rates of Fannie Mae, Freddie Mac, MBA, and NAR to rise to 3.17% for an average of all four lenders. Additionally, the rates for quarter one of 2022 are likely to rise to 3.32%, and for quarter two and quarter three of 2022, they’ll rise to 3.45% and 3.55% respectively.

Why This Matters

If you haven’t done the math yet, you might not know how much this translates to every month. After all, does a fraction of a percentage point really matter that much? Actually, even small moves in percentages can add up to hundreds of dollars in interest every month. For instance, if you have a $350,000 loan and have a 2.99% interest rate on it, you’ll pay $1,474 every month. But if you have an interest rate of 3.55% on the same amount, you’ll end up paying $1,581 a month.

Can You Afford To Wait?

You might think that this means that you’ve missed out on your opportunity to save a lot of money, but you can still make great strides on front of saving money on your interest for your home mortgage. Even though rates have climbed somewhat, you can still save a lot of money by acting now and locking in a low-interest rate before they climb any more.

If you’re ready to get a great loan on a new house or simply refinance your current house for a better interest rate, don’t wait. If you act now, you could save yourself tens of thousands of dollars over the course of your loan. And if you’re looking for homes for sale in Estes Park, make sure that you check them out now so that you can buy and secure your loan.