We have been talking for weeks about how mortgage rates are rising.
This week they hold steady at an average 30-year fixed rate of 4.06%. And with that, mortgage applications are down. Within the data it showed that the Market Composite Index fell 13.1%, the Refinance Index dropped 15.6% and the Purchase Index declined 10.1%.
Unfortunately, buyers are still facing the inventory shortages and the higher purchase prices. It has been difficult for awhile but, as professionals, we suggest buyers keep trying.
Mortgage rates are on the upward trend. There is no data to suggest otherwise at this point. Getting into the housing market now will increase your chances of saving money on your monthly payments.
We will show you the math below to explain how much money you could save now versus waiting:
- For a $500,000 loan amount at a 4.00% interest rate, your principal and interest payment monthly is around $2,380.
Let’s say you wait a couple of months to get into a home and rates go up to 4.500%
- For a $500,000 loan amount at a 4.500% interest rate, your principal and interest payment monthly is around $2,530. That’s a $150 difference every month and an $1,800 difference every year.
Not only would you save more money now rather than waiting, but rents are also rising.
Realtor.com reports that in January 2022, the national median rent had reached $1,789, up 19.8% year-over-year, increasing over five times as fast as the 3.4% increase seen before the shutdowns in March 2020. And when you rent, you’re paying off someone else’s mortgage who is also building equity.
At Residential First Capital, we work with you and your agent to put the strongest and best offer on the table even with less than 20% down. We can go as low as 3% down so you are not putting all your cash into the home.
We get you fully pre-approved with underwriting BEFORE you make an offer thus allowing us to close in 19-21 days versus the industry average of 30 days.
Reach out to us today to discuss your options on homeownership. RFC does everything from Conventional mortgages to Private Money. We can help any situation that is financeable.