In real estate, mortgage interest rates are always a hot topic. Interest rates have been hovering above 4.00%. The projection is that they are going up. When interest rates go up, that affects a consumer’s buying power. Higher rates often mean a lower purchase price of a home, as lenders look at the debt to income ratio of a borrower. Debt to income ratio is the percentage of a consumer’s monthly gross income that goes towards paying debts in comparison to their monthly income.
The interest rate on my mortgage is currently 5.875%. I remember refinancing to get that rate. It wouldn’t benefit me to refinance again, to get a lower rate now, as I anticipate having it paid off within 18 months. I wouldn’t be able to recoup the cost of the refinance in just the 18 months I take to pay if off.
I remember when interest rates were 13%. Heck, I remember when they were 18%. But, I also remember when houses were selling here in Melbourne for $25,000 to $50,000. Those same houses today are going for $150,000 and up.
Interest rates are projected to go up. And the word from analysts is to buy before they get too high. That’s probably pretty good advice.
To get an idea of what interest rates look like, check here. Your best source of information will be a local lender.
Where are mortgage interest rates?