New Year, New Interest Rates! Have you been dreaming of building a new home? 2017 is your year.
Now is a great time to go ahead and make that dream come true. It’s a new year – and the perfect opportunity for a new start. It’s also a good time because interest rates are going up, and that will influence both how much home you can afford, as well as how much you’ll pay over the span of the loan.
Over time, as the Fed raises rates more, mortgage rates are expected to move up too. According to CNN Money, the typical fixed rate on a 30-year mortgage is currently around 4.1{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27}. Before the election, a typical 30-year fixed rate mortgage was 3.5{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27}, according to Freddie Mac.
While rates are rising quickly, they are still low. For example, during the last economic expansion, mortgage rates were between 5{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27} and 7{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27}. In the 1990s, rates were even higher, shifting between 7{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27} and 9{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27}.
Think a one or two percent increase won’t affect your bottom line too much? Think again!
$300K home – 30-year mortgage
4.1{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27} = $1,450 / monthly payment
5.1{459c3f97d3807641e44bb01632b2f91916cef314d016c0f749c2f3d2b32b4e27} = $1,629 / monthly payment
Difference of $179/month adds up to $64,440 over the life of the loan!
Start building your dream home before rates continue to rise. Elite Homes offers a wide variety of single-family and garden home floor plans in communities throughout Greater Louisville, quick move-in showcase homes are available as well!