Are you looking to get yourself abreast with how much influence the rising mortgage rates can affect your home buying power? Here in this article, we give succinct information on how much you could be spending on buying your very next house in 2019.
According to Zillow, the surging mortgage interest rates combined with increased home prices has increased the monthly cost for buying a home by a whopping 15percent. This translates to a significant reduction in buying power for the intending homeowners. Say you are a buyer with $3,000 housing budget, it is estimated that you could be losing about $35,000 in purchasing power in 2019. Meanwhile, Freddie Mac’s recent survey reveals that the 30-fixed mortgage is clocking a full percent and higher than it was in the previous year.
“As buyers, we understand that the mortgage interest rates we find play a huge role on how much our lenders can let us borrow.” Say Viktor and Alexander, who are both real estate investors in Seattle and cofounders of iwillbuyhouse.com. With that said, it is clear that mortgage rates affect the purchasing powers of buyers, but, how much exactly? Since the last decade, buyers and sellers have been accustomed to the low rate environments, consequently, the increase will require a little bit of adjusting.
The lenders of today’s American market have put in place a list of factors that qualify home buyers, just as you can’t get conventional loans when you don’t meet some certain criteria, the same thing is applied to mortgage loans. Know that the lender would love to access your debt-to-income ( DTI ) ratio, credit score, work history and the size of your down payment.
If you do your math well, you’ll come to see that given the predictions by Zillow, it’d be wise to insure against the surging mortgage rates. Say you are looking to qualify for the maximum loan amount, it is certain that you’ll qualify for a less a home if the rates rise again. While there may be several flexible options to explore, in order to acquire your dream property, the best, however, is taking advantage of the current mortgage rates because sooner or later, the rates will rise again.