As the economy continues to strengthen, financial experts expect mortgage interest rates to start rising by mid-2015. The Federal Reserve has kept interest rates low in past years to stimulate spending, but with economic growth and a drop in the unemployment rate, interest rates are going to rise.
If you are considering the purchase of a home, how will a rise in interest rates affect your mortgage payment?
These figures provide a fairly clear picture as to why it makes financial sense to purchase your Florida new home and lock in your mortgage rate now, before the expected rise in rates occurs later this year.
With today’s average rate of 3.76% (source: Freddie Mac), a $170,000 mortgage with a term of 30 years will run you about $788 per month for the principal and interest (not including taxes, insurance or PMI, if applicable). If rates go up 1%, as many financial experts expect to happen this year, the same mortgage will cost you $888 per month — $100 more! How many pairs of shoes, dinners or fun nights out with your honey could you enjoy with that extra $100 in your pocket? A 2% rise in interest rates will cost you $205 more per month than if you purchased and locked in your mortgage rate today.
Looking not just towards the future, but at the past, we are in a historical era of low mortgage rates. Back in the 2000’s, this same $170,000 mortgage would have cost you $1,051 per month for the principal and interest — and, many people remember the 12.70% average rates of the 1980’s!
If you are thinking about buying a home, now is the time to take action and start the ball rolling! It makes “cents" — literal, extra-money-in-your-pocket, sense — to purchase today while rates are low.
We build new homes in Orlando, Tampa Bay, Polk County, Manatee County and Ocala, Florida. With more than 30 stylish home plans to choose from, with pricing from the $130’s to $290’s, we are sure to have the perfect home for your needs and your budget. To find your new home in Florida, give us a call at 863-797-4999 or visit the Highland Homes website today.
Mortgage interest rates, terms, down payment, and qualification guidelines vary per loan type and based on your credit and other qualifying factors. To determine your personal purchasing power, contact a Highland Homes preferred lender.
Tags: mortgages Federal Reserve program interest rates florida new home low mortgage rates mortgage mortgage rates Florida new home builder Florida new home FL
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