Over the past couple of years many of our clients have decided to move up to accommodate their growing families. Recently, the benefit for homeowners has been rising values and shrinking loan balances. Together, these factors have created new possibilities for many to sell with a surplus. You may be wondering, is now a good time to buy a bigger house?
If you have considered a change, locking in a payment before interest rates and prices possibly increase may be a good long term plan. Look at how much a payment could potentially change with a 10% price increase and a 2% increase in interest rates:
This is a 27% increase to both the payment and the necessary income to qualify. That’s substantially more than the typical pay increase of maybe 3% percent or so.
These hypothetical examples are illustrations for educational purposes only and are not an offer to lend nor a Good Faith Estimate. Examples are for a $250,000 home that rose to $275,000 with a rate increase from 4.50%/4.762% APR to 6.50%/6.95% APR on a zero point 30-year, fixed-rate loan with a 20% down payment, $4,000 in taxes and annual insurance of $580 for the “today” example and $638 for the “tomorrow” example. APRs are calculated using closing costs equal to 3% of the loan amount. Actual costs can be less, and actual rates are subject to change at any time. Qualification for any loan is dependent on individual circumstance and subject but not limited to employment/income, credit history and acceptable liquid assets to close.
The real estate market typically slows in the winter months, and that can be a great time to take action. Most participants are truly serious, and both buyers and sellers become even more motivated in the face of dwindling competition.
Whether you’ve thought about a move, some remodeling, how to pay for college or any other strategic loan restructuring, We’re here to answer your questions.