If you've considered buying a home recently, you are likely keeping a close eye on mortgage interest rates. While no one knows how high rates will go, lenders I have spoken with recently predict rates will stabilize between 5% over the next 2 years. So how important is it to buy before rates rise anymore? How much will 1% save you?
Just for fun I did a little math on my mortgage calculator. Turns out when buying a $200,000 home, a 1% interest rate increase (4%) for a buyer with a 700 credit score using a 30 year conventional loan will cost you an estimated $40,680 over the course of the loan. So if interest rates rise 2% over the next 2 years I estimate that same buyer will pay over $81,000 more for their home! Rising interest rates make this a great time to buy and save.
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