Why buy now? Time is of the Essence
Reason #1: Low Interest rates are not forever
“A reason to look now into buying a home is because these rates won’t stay [put] forever. That’s what rates do they go up,” says Jay Plum, executive vice president of Huntington National Bank, in Cincinnati, Ohio.
A 30-year fixed mortgage is expected to increase by the fourth quarter of two thousand fourteen, 5 percent, and 5.3 percent by the end of two thousand fifteen, according to recent calculations by the Mortgage Bankers Association (MBA).
To buy a home today for $300,000 with a 30-year fixed mortgage at 4.5 percent, monthly payments amount to $1,520.00.
With an interest rate increase of .5 percent, to buy a home for $300,000 at 5.0 percent, monthly payments increase to $1,610.00, cost of home for 36 months increases to $32,400.
Increase interest rates one more time .5 percent, to buy a home for $300,000 at 5.5 percent, monthly payments increase to $1,703.00 cost of home for 36 months increases to $65,880.
What will cause interest rates to climb? Approximately six months after the Federal government stops buying mortgage bonds, they will begin to increase rates. It is projected to happen sometime in 2015, says Plum.
Not convinced to buy a home yet? Continue to follow Knight West Homes for more reasons why buying now is the time.