Many clients have told us over the past couple of years they would like to move up to accommodate their growing families or to downsize now that the kids have moved on. While many have already done so, others have felt encumbered by a current home that couldn’t be sold for a price that would cover the expenses.
It turns out, there are advantages to the passage of time. 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.
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 picks up in the spring months. It’s a great time to snatch up a good deal before the spring competition heats up.