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Move Now Before the Interest Rates Do

November 8, 2018

It’s been ten years since the bubble burst. For the past few years, we’ve seen the rebound happening in the housing market. That’s good news for sellers as the resale value of their home is going up. If you’re a buyer, you’ve missed the record low prices for homes and mortgage rates. But the longer you wait, the more it will cost you to buy a new home. Move now before the interest rates do!In September 2017, a 30-year, fixed rate mortgage averaged 3.78%. In the beginning of 2018, it creeped up to 3.95%. In August, the rate reached 4.66%, and as of November 5, 2018, the mortgage rate was 4.86%. Predictions point to hitting and surpassing the 5% mark in early 2019, and as high as 5.5% a year from now.All these digits and decimals don’t mean much until you look at how they impact the cost of buying a home. So, let’s put this in perspective, dollar-wise.You’re pre-approved to buy a home for $260,000, with 5% down, which means you’re financing $247,000. Here’s what your monthly mortgage would have looked like between January 2018 and January 2019. Using Zillow’s mortgage calculator, here’s what we found:January 20183.95%$1,597August 20184.66%$1,700November 20184.86%$1,730January 20195.0%$1,751   The 1.05% difference in one year costs $154 more per month and $1,848 per year. What can you afford?It’s not just the mortgage rate that’s rising. Housing prices are going up, too. The $260,000 home you’re looking at now was probably about $230,000 a year ago, and will keep rising. Before long, the home is beyond your affordability threshold. Waiting means you pay more interest for less home.You hear people talking about the “right time to buy” and “wait it out”. You need to ask yourself, “What am I waiting for?” If you’re simply not ready—emotionally and financially—to commit to this investment, that’s a fair answer. But if you think you can’t afford to buy a home, chances are, you’re mistaken.With such a wide range of mortgage loan programs available, you might discover that you actually CAN afford to buy a home. FHA, VA, and USDA offer government-guaranteed loans with low or no down payment. Even if you don’t have a stellar credit score, you could qualify for some programs. But if you don’t look, you’ll never find out. If you’re a renter, what you pay in rent right now is probably more than a mortgage payment. Imagine saving money on the monthly payment and gaining an investment as well.No matter how you look at it, procrastination is going to cost you. You’ll pay more for a home—in both the purchase price and mortgage—and you’ll lose out on the equity you could be gaining by making the move sooner rather than later. Even if the rates dropped at some point, you could refinance. But if you do nothing at all, you’ll pay for that decision.Cothran Homes can help you achieve the dream of homeownership. Consider buying a townhome, a great start for the first-time homebuyer or downsizer. You don’t need to worry about exterior maintenance but you have a home to call your own. We build both townhomes and single-family homes in the Greenville, SC, area—one of the fastest growing markets in the country right now!Whether you buy a move-in ready home or commit to building a new construction home with us, you can lock in your cost immediately, before the mortgage rates go up again. Look at our homes and communities to see how affordable homeownership can be with Cothran Homes. Then contact us to get moving!

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