Are you ready?
Do you know how it will affect you?
Which house would you prefer?
Are you contemplating purchasing a home? A lot of buyers make the mistake of only looking at the sale price of a property when deciding to buy a home or vacation home. In reality, the timing of the purchase could be even more important. If you have been on the fence, the time to purchase may be now.
Consider this……
For each percentage the Federal Reserve raises interest rates, it decreases a buyer’s purchasing power by 9 to 11% (depending on loan amount) – and the Fed’s have given every indication that rates will be going up! The interest rate you pay on a home affects you monthly over the life of the loan.
Below is a graph that gives some great examples of how interest rates affect YOU, the consumer.
Monthly Payment Table for 30 year loan with Interest Rates from 3.500 to 6.000 Percent
| Loan | 3.500 | 3.812 | 4.125 | 4.438 | 4.750 | 5.062 | 5.375 | 5.688 | 6.000 |
| 150000 | 673.57 | 700.00 | 726.97 | 754.47 | 782.47 | 810.97 | 839.96 | 869.41 | 899.33 |
| 160000 | 718.47 | 746.67 | 775.44 | 804.77 | 834.64 | 865.04 | 895.95 | 927.37 | 959.28 |
| 170000 | 763.38 | 793.34 | 823.90 | 855.06 | 886.80 | 919.10 | 951.95 | 985.33 | 1019.24 |
| 180000 | 808.28 | 840.00 | 872.37 | 905.36 | 938.97 | 973.17 | 1007.95 | 1043.30 | 1079.19 |
| 190000 | 853.18 | 886.67 | 920.83 | 955.66 | 991.13 | 1027.23 | 1063.95 | 1101.26 | 1139.15 |
| 200000 | 898.09 | 933.34 | 969.30 | 1005.96 | 1043.29 | 1081.30 | 1119.94 | 1159.22 | 1199.10 |
| 210000 | 942.99 | 980.01 | 1017.76 | 1056.25 | 1095.46 | 1135.36 | 1175.94 | 1217.18 | 1259.06 |
| 220000 | 987.90 | 1026.67 | 1066.23 | 1106.55 | 1147.62 | 1189.43 | 1231.94 | 1275.14 | 1319.01 |
| 230000 | 1032.80 | 1073.34 | 1114.69 | 1156.85 | 1199.79 | 1243.49 | 1287.93 | 1333.10 | 1378.97 |
| 240000 | 1077.71 | 1120.01 | 1163.16 | 1207.15 | 1251.95 | 1297.55 | 1343.93 | 1391.06 | 1438.92 |
| 250000 | 1122.61 | 1166.67 | 1211.62 | 1257.45 | 1304.12 | 1351.62 | 1399.93 | 1449.02 | 1498.88 |
Below is a table of potential rate hike probability of increases for the NEAR FUTURE.
BOTTOM LINE… NOW is the time to pull the trigger!
There are lots of steps that go into purchasing a home.
The first step is finding a lender that you are comfortable with and going through the process to determine what your maximum approval amount is for a purchase price. Buyers should take the time to “shop around” to insure you get the best rate and compare all other costs and fees associated with the loan. The industry standard of borrowing for a home is no more than 28% of gross income and that’s assuming all debt services are under 36%. A buyer can help reduce his/her costs by putting 20% down on a property which will eliminate private mortgage insurance. PMI is insurance that protects the lender from non-payment.
A buyer’s pre-approval amount doesn’t necessarily mean that’s what you want to spend on a property.
You need to consider your lifestyle and your comfort level. Does the home you are purchasing need renovations? Do you have college education ahead? Do you enjoy vacationing with family? When you purchase this home are you wanting all new furniture? Are you planning for retirement? Where is your comfort level with the loan amount? As a real estate agent here in Branson MO, I know lots of new home owners want to purchase a boat and additional lake toys. These questions need to be answered prior to finalizing your maximum loan amount.
Get Yourself A Buyer’s Advocate
It’s also key that you get a buyer’s advocate: a real estate professional who has knowledge of the area in which you are purchasing. You want someone who will help you navigate the buying process. They should be able to bring not just knowledge of the area, but listen to what your desires are for your new home and then be able to comb the inventory and produce homes that fit your criteria.
They need to be able to help you understand nuances of the area, for example: septic systems; wells; homeowners and condo association dues; boat slips, HOA’s, COA’s, state and county laws that might affect you.
The agent should have an extensive vendor list to help you during and after purchase; inspectors, roofers, handymen, plumbers, movers, gas companies, electric companies, churches and so much more. This will help ease the buyer’s transition into a new community.
So choose wisely, interview, make sure your communication styles fit. You will be spending a lot of time with your agent and you need to trust them to work on your behalf.
Our goal at Table Rock Realty Group is to treat our client’s home as if it was our own. We know that if we do that, we have provided a higher level of service.
Author: Sharol Nuckolls, REALTOR©
Table Rock Realty Group is Different by Design, offering a superior level of knowledge, expertise and complete Concierge Real Estate Services. We also have a dedicated office manager to best serve our clients. Call us today if you are looking for property in the Branson, MO or Table Rock Lake areas – or if you just have questions about real estate. We can even help you find a quality REALTOR© in another community.
Call Sharol Nuckolls @ 417.593.2010 or Liz Chun @ 240.344.4582 today! You’re invited to search our website @ TableRockRealtyGroup. com or follow us on Facebook or find us on Pinterest, Twitter, Instagram, & Google+. We look forward to helping you navigate your real estate journey!
Table Rock Realty Group 