[video_embed name=”Mortgage Rates After Election”]
The mortgage rates after the election, we all wondered if it would happen, and it happened, rates when up just a day after the election. What does this mean and what did that rate rise cost you? Here is a breakdown of what this may mean for you if you are deciding whether to buy now or continue renting.
Based on a $450,000 home purchase, this will cost you roughly $115/mo more (4% w/4.18% APR). Let’s say rates will go up just a bit more next year, so you are looking at another increase to that monthly payment, plus the home appreciated so now the purchase price is now $27,000(4.5%, 4.69% APR) more to purchase. So now you’re looking at this and feel it would be better to wait another two years until it simmers down. But let’s put this on the other spectrum; let’s say you chose to purchase this property today. Now you have owned the property for three years. Then you choose to sell the property after three years, you are looking at the typical appreciation which would be around 6%, so you would be selling the property at $535k. Now you not only had tax benefits for three years but after paying the closing costs and down payment and the cost to sell you still are left with an $82,000 gain! Do you think it’s honestly worth waiting to purchase?
Bottom line, it is still a great time to buy! If you have any questions and/or would like to look into purchasing, contact us.