We know that mortgage interest rates have been rising, but Palm State Mortgage Company cautions you not to worry. As CNN recently reported, “Mortgage rates have been on a steady rise recently, but buyers shouldn’t panic because rates are still very low.”.
First, Let’s Get A Definition
Interest Rates Defined, and Refined at Palm State Mortgage Company!
Basically, the average home shopper might not have a clear definition of interest rates. Palm State Mortgage Company wants you to have a basic definition of what they are and mean, beyond the “cost of using money.”
According to the experts, “Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis. This is known as the annual percentage rate (APR). The assets borrowed could include, cash, consumer goods, and large assets, such as a vehicle or building.”
For average people, the largest interest rate that they will pay, will be on their largest purchase—their home.
To put it simply, today’s experts report that the average rate for 30 year fixed-rate mortgage has inched up from 4.13 percent to 4.16 percent this month.
A quick look back at 2016 shows us where we were last year at this time: 3.97 percent. Of course, we are generalizing any time we talk about interest rates.
Palm State Mortgage Company believes what works in real life, especially for home mortgage loans, is the deal.
We believe in the deal and the interest rate that helps you manage to become a homeowner, according to the parameters of your individual financial situation.
Interest Rates in Plain Language
If your home has a $241,000.00 price, and you make a 20 percent down payment, here’s your bill, broken down per month: At today’s interest rates your cost will “average” out to about $21.00 more per month this year over last year.
Investigating Life after Debt!
The Internet has a Treasure Chest full of help. This is especially true If you are considering home ownership, but the rising rates are making you skittish.. For example, your option of renting versus buying can be
explored using such tools as a calculator formula at Smartasset.com.
You can input your geographic area, and obtain mathematical information on the difference between renting and buying in your town.
Homework for Buyers
Will rising interest block your dream of home ownership?
Likewise, buyers can look to Realty Times, for the latest news and information about rates. “When the rate was raised last week, the Fed predicted it would raise rates three more times in 2017.” This is up two in its previous forecast. However, “predicted increases are just that – predictions,”
Be advised, you can take that with a grain of salt! The report added, “A year ago, the Fed projected that it would raise rates four times in 2016 but has ended up doing so just once.”
Matthew Gardner, chief economist at Windermere stated, “My forecast is for the 30-year fixed rate to rise above 4.5 percent by year’s end, and worst case scenario, knock on the door of 5 percent.” In fact, many housing pundits predict that rates will rise to a benchmark of 5%, but this is not bad news for the average home-buyer.
So, Let’s See The Good News:
So, what kind of good news can we expect as we approach Valentine season in 2017?
- Home price increases could stabilize and slow down.
- Home shoppers could find “deals” in this new market, since borrowing has so few detriments.
- 2016 might have spoiled our perception of “good” interest rates. We have been getting “30-year fixed rates in the low 3’s and fifteen year rates solidly in the 2’s.” That’s lower than the rate of inflation is likely to be in coming years.”
- Len Kiefer stated he “expects home prices to continue to rise in 2017, but at a slower pace than we saw in 2016.” He added, “The supply is pretty low compared to demand and that will keep pressure on prices and rents.”
- As is often the case, the rate increases might be more painful in expensive markets, and experts site San Francisco and Manhattan as examples. “Affordability is already difficult in some markets,” said Erin Lantz, vice president of mortgages for Zillow.”
Rates On the Rise: Don’t Worry—Be Happy!
Florida Families celebrate Home Ownership with the Help of Palm State Mortgage.
As CNN has reported, no one should welcome higher interest rates with open arms, but it should not be a crushing blow to the dreams of buyers who really want a home, according to Keith Gumbiger, vice president of HSH.com.
He also urges calm in spite of seeing the rates inch upwards. He stated, “We still have quite a ways to go for rates to be even close to average.”
He reminded readers that, “In 1996, the average rate was 5.67%, and in 1990 it was 10.13%.”
So, here in the Orlando, we continue to see more and more savvy home buyers every day, quite eager to lock in today’s low rates.
We promise to follow this story with a Part Two in the near future. Meanwhile, we thank you for visiting the Palm State Mortgage Blog, and we hope you are getting set for a Happy Valentine Season.
