Mortgage Rates Rose Up in September!
According to NAR, Mortgage rates rose by more than one percentage point in September. This means that the cost of living in a home is 12% more expensive than those who bought it a month ago; that's$250/month more! What's a good example? According to Freddie Mac, rates increased from 6.02% to 6.29%. This may not seem a lot but let me give you a number in terms of $$$. In a $400,000 loan, the payments will look at $2,470 compared to $1,660 a year ago.
In the meantime, homes will not drop their value; they will appreciate, and their value will stay high since the housing supply is low. Thus, positive equity will allow you to refinance and get a new rate.
Side Note: The last quarter of the year (August-December) represents 24% of all transactions, which is the slowest quarter of the year. No matter how the market gets, transactions are closing every day.
Interest Rates
Now that interest rates are high, we might never see them as low as 3% again! At least in anytime soon!
Can you afford a higher interest rate?
You can also buy discount points. This means you can buy down the rate of the interest.This will cost you 1% of the borrowed money and lower the interest rate by .25%. Again, get with your lender; if you don't have one, I can refer you to a loan officer who can help you in more detail.
Do you plan to live in this house for the next three years?
If not, then maybe renting will be best for you. I also do not recommend buying down some points if you plan to sell it before three years. It will only be a waste! On the other hand, buying down the interest will save you money if you hold it for a long time.You will always win if you have owned real estate for a long time.
HAVE MORE QUESTIONS? I GOT ANSWERS
The decision to buy a property or rent a unit is yours. It has its ups and downs, and you should decide what makes you more comfortable. The minimum credit score for an FHA loan is 580 and 620 for a conventional loan. If the property were bought with a little of 3.5% down, in an FHA loan, you would have to pay Mortgage Insurance Premium (MIP) until you have an equity of 20%. In a conventional loan, you will have to pay Private Mortgage Insurance (PMI) until you reach20% of the loan. If you want to buy, sell, or lease, don't hesitate to contact me; I will reach out to you as soon as possible!Remember that History Doesn't Repeat Itself, but It Often Rhymes Mark Twain.
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Reymundo Ramirez
REALTOR®
832.639.4884
meet-rey@kw.com
Sources:
https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-september-29-2022
https://www.nar.realtor/blogs/economists-outlook/instant-reaction-mortgage-rates-september-22-2022
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