Mortgage rates and affordability
Today’s mortgage rates remain low and this is good news if you’re in the market to buy a home.
Just like your credit and down payment affect ( Affordability Article Link) how much home you can afford (Link) mortgage rates are not to be ignored. If you’re in the market to buy a home, you’ll want to watch mortgage rates. carefully and understand how a rise in rates can make a home that was once affordable, unaffordable.
The 30-year fixed mortgage rate averaged below 4% over the last year, making rates historically low compared to almost any year since Freddie Mac began tracking rates in 1971 (when they averaged just below 9%).
So, why is a lower mortgage rate better? Simply put, lower mortgage rates make homes more affordable, which increases your purchasing power — the financial ability to buy the home.
FYI – The 30-year fixed mortgage rate hit a record high of 18.63% in 1981.
To put rates in perspective, this chart outlines a $200,000 loan financed at various rates – allowing you to quickly see how rates impact your wallet.
| 30-YEAR FIXED MORTGAGE RATE | APPROXIMATE PAYMENT ON A $200,000 MORTGAGE |
|---|---|
| 3.5% | $ 898.09 |
| 4.0% | $ 954.831 |
| 4.5% | $ 1,013.37 |
| 5.0% | $ 1,073.64 |
Mortgage payments are principal and interest only, based on a $200,000 fully amorting mortgage. All terms are assumed to be 30 years. Freddie Mac
Consider discount points
You may want to consider talking with your lender about buying discount points upfront to “buy down” your mortgage rate. Buying discount points can save you money over the life of the loan, but whether it makes sense depends on your personal situation. You can pay extra points which will might lower your rate.
Keep in mind that your (understanding your credit rate link) credit history can directly impact the rate you are given by your (working with your lender link insert) lender. The better your credit, the better your rate.
If you’re clamoring for more room to accommodate your changing needs, making a move may be your best bet, especially while you can take advantage of today’slow mortgage rates. It’s a great time to get more home for your money, just when you need it most. Let’s find out your Motivation to move right now is. Contact The Wagner Team for consultation on yor needs.
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