How does the rise in mortgage rates affect YOUR purchasing power?

Are you ready?

Do you know how it will affect you?

Which house would you prefer?

THIS

 

OR THIS?

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

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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

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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!

 

 

 

 

Simple steps to making a budget

Simple steps to making a budget.

Simple steps to making a budget

Get your spending under control, so you can live

the life you deserve.

• Budgets are necessary.  In today’s world with credit cards & ATM’s at every corner and American’s desire to “have it all”.  The only practical solution is to set boundaries on your own spending.  And then STICK to them.
• A general budget includes three components; 1.  Identify current spending, 2.  Evaluate spending & set long & short term goals.  (Ex.  Short Term-  Family Vacation, Long Term: Retirement planning)
• Keep it simple- buy some software to make the process easy.  Lots of great software programs available and they are worth the investment and will pay dividends because they will effectively track your success or failures.  A couple of examples are: Quicken & Microsoft Money
• Watch for the “leakage”.  The impulse ATM withdrawal or the cash back at the grocery store cause havoc on the budget.
• Living like a rock star on a waiter’s salary is dangerous & unhealthy.  Government statistics show that many households making under 50K or less are spending more than they are bringing in.  What starts as “a little leakage” over years could turn into full-blown bankruptcy if it’s not reined in.
• Don’t count on winning the lottery or a long-lost relative leaving you an inheritance.  The probability of winning the lottery are 1 in 175,223,510.00.  This also includes company bonuses that fluctuate.  Set your budget on your salary and feel blessed if there is additional dollars that come in.
• Don’t hide “want to have’s” in your necessities of life budget.  Clothing is a necessity, but Tommy, Nike, Christian Dior etc isn’t, and shoes are a necessity but 10 pairs are not.  Make it a goal to simplify your budget, less is best is a great motto for your closet.
• False High-  Promotions, Raises and Investment successes are great.  But it’s not a green light to go spend, first take a look at inflation and realize the high & lows of investments.  This is a perfect time to increase your saving, because your budgeting is fueling your success.
• Pay yourself forward.  Set aside 10% of your budget for “Big ticket items”.  By sticking to your budget and having this category, you reward yourself for good behavior.
• Charitable Giving category  It’s easy to see this evaporate away, but if you stick to a goal here, I truly believe it comes back to you 10 fold.  Find an organization, church, or cause that you are passionate and get involved not just with money but time.
• Do you desire a home?  Put a team together of professionals to work with you and for you to attain that goal.  (Ex.- Real estate, mortgage, accountant etc.  A home is one of the most expensive items you will ever buy, form a relationship early and gain insight on their knowledge.

Branson Landing

If your looking for a home in the Branson, MO area,

Call Sharol Nuckolls @ 417-593-2010 or go to my website @

TableRockRealtyGroup.com

Here are a couple of websites or blogs for additional help:

#1 Reason loans for home financing get denied- Kathey Grodi- CPA

8 Financial Tips for Young Adults

Personal Finance Tips

5 Financial Tips for the Furloughed

Find me on Twitter, Facebook, and Google+ as well.

Author:  Sharol Nuckolls

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