Mortgage Interest Rates – the current status.
5% v. 6% Mortgage Interest Rates
What happens if you wait in the current housing market? It’s not easy to hide – interest rates for mortgage loans are increasing and they are slated to increase into the 6% range in 2014. This week we saw 30 year conventional fixed loans reach 5% for the first time this year. However, this is no reason to panic. In previous blog posts, I have discussed how interest rates of today compare to past interest rate trends, and what happened in June when interest rates rapidly increased. Both of these post are still current in today’s market. While we have seen mortgage interest rates go from see-saw-like trends to more stable, they are, as mentioned before, slated to increase. What can you do about this now?
Time to buy!
I encourage anyone who is interested in home ownership to buy now. You can be a first time home buyer, someone looking to upgrade to a new home, or perhaps your family is getting bigger and you would like to have more space – buying now instead of waiting is going to not only save you money now since home values are increasing – but it will also save you more money in the long run as you work on paying back your mortgage loan since mortgage interest rates are also increasing. The following table is a comparison of the same conventional fixed rate 30 year mortgage loan at $440,000. The first table compares the interest-only payment and total interest paid for the same loan – one with a 5% mortgage interest rate and the second with a 6% mortgage interest rate. The difference is very surprising! Also included in the table is the amortization schedule. This displays the 30 year loan with interest paid every year for the loan, the accumulated principle for each year, and the amount of the loan that remains after each year. The numbers speak for themselves!
Should We Wait to Buy (PDF)
As always, I am more than willing to answer and questions about mortgages and mortgage interest rates! You can find me at http://www.jesseituttle.com
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