We’ve heard rumor that the Fed is going to raise the interest rates soon.
What does that mean to you?
As a buyer, you lose buying power because you can afford less.
- An example would be a $100,000 mortgage payment, amortized over 30 years, with a 4% interest rate equals a $477.74 per month payment of principal and interest.
- That same $100,000 mortgage if the interest rate goes up only ½ percent equals a monthly payment of $506.98. Or at 5% equals $537.09.
What this means to sellers is the buyer that could afford a $300,000 house, perhaps now can afford $275,000 and you’ve lost a segment of your buying pool.
So buyers and sellers should act now, before this happens.