Mortgage Rates Are Trending Up - Should You Worry?

photo Mortgage Rates Are Trending Up - Should You Worry? images

photo of Mortgage Rates Are Trending Up - Should You Worry?

Mortgage Rates Are Trending Up - Should You Worry? : Unless you plan to buy your home with cash (lucky you!), it's important to know what's going on with mortgage rates these days. The bad news is that they are rising. The good news is that they have been at historic lows since the housing market crashed nearly 10 years ago.

Unless you plan to buy your home with cash (lucky you!), it's important to know what's going on with mortgage rates these days. The bad news is that they are rising. The good news is that they have been at historic lows since the housing market crashed nearly 10 years ago — and they are still low. But since they probably won't stay this way forever, let's take a moment to learn what rate hikes could mean to you.Should you hurry to buy a home?When rates start to rise, homebuyers often rush to buy a house — in theory, these buyers are hoping to get into a new home before rates go any higher. But Ralph McLaughlin, Trulia's Chief Economist, advises against this. "Don't rush," he says. "Buying the wrong home can be a costly mistake to fix. Mortgage rates are just one of many factors that go into the decision to buy a home — and it certainly shouldn't be a deal breaker," says McLaughlin.How does an increased rate affect loan payments?would have to hit 9.1% before renting becomes cheaper than buying a home in most major markets," says McLaughlin. "Even in the most expensive markets, rates would need to be over 5% to tip the scale on the rent versus buy math." If you think you might move in five years, there are ways to get a lower interest rate (if you qualify). You could take on a five-year adjustable-rate mortgage, which could get you a lower interest rate — plus rate increases at years four and five.What about the price of a home?There's good news for some homebuyers when interest rates increase. Yes, you read that right. Increased rates often mean a decrease in the number of potential buyers — and that can bring down home prices. For instance, even if you have to pay $100 more per month because of a rate increase, things could still balance out — or you could even come out ahead — if you get the home for less.But if competition is fierce and inventory is tight, home prices will be high. That factor, not the interest rate, will probably drive whether you can afford to buy that home for sale in Sarasota, FL or Seattle, WA. "At the end of December, we saw that the number of starter homes on the market fell by 12.1%, while the median list price of these homes rose by 7.6%," says McLaughlin.Will there be more rate increases?No one knows what the future will bring, including what will happen with mortgage interest rates. Most experts expect rates to continue to increase, but those increases could be minimal. A rate increase will probably be felt most by people in expensive markets whose budgets are already stretched. "We think rising mortgage rates will cool home buying in California and the Northeast, where Trulia's Rent vs. Buy margins are slimmest, but won't have any noticeable impact in the rest of the country," says McLaughlin.Will getting a loan be more difficult?The potential for rising interest rates might make you wonder whether you can even qualify to buy a home. The good news is that the current mortgage rates probably won't make a difference. "When it comes to qualifying for a mortgage, how rates are trending really doesn't matter," says McLaughlin. "What does matter is your credit score." However, if a higher interest rate would change your status from qualified to declined, there are things you can do. "These households will either have to put a larger down payment on their dream home or find one that is less expensive," says McLaughlin.It's also important to comparison-shop. If you no longer meet traditional loan guidelines because of higher interest rates, you may need to keep searching until you find a lender who can work with you on a low down payment or flexible underwriting options.Are you planning to buy a home in 2017? Tell us what you think about rising mortgage rates!

Source www.forbes.com.


related Mortgage Rates Are Trending Up - Should You Worry?

Who Won ‘The New Celebrity Apprentice’ Tonight?

Which of the cast members prevailed on tonight's finale episode of "The New Celebrity Apprentice"? Who is the winner and won the most money for their charity?

‘This Is Us’: What Time & Channel Is ‘Jack Pearson’s Son’ On?

Another new episode of 'This Is Us' is on tonight. Find out when 'Jack Pearson's Son' airs on NBC and watch a preview.

Connie Chung, Maury Povich’s Wife: 5 Fast Facts You Need to Know

Journalist Connie Chung and talkshow host Maury Povich have been married for over 30 years. Here's a look at her relationship and her Donald Trump feud.

Justin Bieber, Selena Gomez, & The Weeknd Feud: 5 Fast Facts You Need to Know

Justin Bieber has made it clear that he isn't happy The Weeknd is dating his ex-girlfriend, Selena Gomez.

Lesly Brown, Pat Sajak’s Wife: 5 Fast Facts You Need to Know

Wheel of Fortune host Pat Sajak is married to Lesly Brown. Here's a look at their relationship and his family.

Douglas Garland triple-murder case: what the jury didn’t hear

The father of a Calgary boy who was killed with his grandparents said their deaths have had a huge impact on his two remaining sons and other members of their family.

Toronto athletic club fire highlights importance of contents insurance, experts say

Experts say a massive fire at a Toronto athletics facility this week that forced the evacuations of six buildings vividly demonstrates why landlords are increasingly insisting

Massive Toronto athletic club fire under control, not considered suspicious

Fire officials say a six-alarm blaze that tore through a historic three-storey athletic club in midtown Toronto and forced the evacuation of surrounding buildings is not considered

No definitive answers after Justin Trudeau, Donald Trump comments on trade

Even with companies and politicians breathing a little easier after Justin Trudeau's first encounter with U.S. President Donald Trump, it remains to be seen what the two

Saskatchewan considering unpaid days off for public sector employees

Saskatchewan Finance Minister Kevin Doherty says the province is considering the same thing as Manitoba to save money – giving public servants unpaid days off.

Congress drops Obama-era rule barring mentally impaired from buying guns

The Obama rule would have prevented an estimated 75,000 people with mental disorders from being able to purchase a firearm, crafted as part of efforts to strengthen the federal

Trains on Metro LRT Line to run full speed starting Sunday

After years of drama and delays, Edmonton's Metro LRT Line will finally start running at full speed on February 19, going up to 50 km/h through intersections.

IN PHOTOS: East Coast digs out from winter storm while bracing for another

You know that joke about Canadians living in igloos? Parts of the East Coast look not too far off after a winter weather walloping.

Should people stay friends with their exes after a breakup?

About 88 per cent of people admit to "Facebook stalking" an ex-lover after a breakup – so does it help or hurt the situation?

Melinda Gates denounces Trump ‘gag order’ on abortion in personal essay about birth control

"My family, my career, my life as I know it are all the direct result of contraceptives. And now, I realize how lucky that makes me," said Gates.

‘ElderDog’ helping seniors care for their beloved dogs across Canada

The charity started in Nova Scotia but is now spreading across Canada.

Kanye West reportedly suffering from memory loss following recent hospitalization

Malik Yusef, who has worked with Kanye West on hits such as 'All Of The Lights,' provided an update about West's current health at the Grammy Awards on Sunday.

mmc-news.com