Mortgage rates on the rise, housing prices steady; what home buyers should do
DELMARVA – Mortgage rates are on the rise and we spoke with a local realtor who tells us what home buyers should do about it.
Tori Lech with Coldwell Banker Resort Realty in Milford, Del. tells us, with interest rates on the up-rise and home prices steady, now is the time to buy. She says some buyers may be waiting for prices to drop, but if they wait while the interest rates are increasing, you’re going to pay a lot more over the course of your loan. “Let’s say pricing does decrease, but interest rates increase so that house that you were looking at that was $400,000 is now 360,000, but now your interest rate is 4%,” says Lech. “So your monthly payment is going to increase let’s say $15 extra a month which doesn’t seem like that much, but when you look at the interest paid over the course of the loan, the 30 years, that’s a significant amount, that’s like 30,000 extra,” Lech adds, “That 1% increase in the interest rate can cost you a significant amount of money.”
We’re told if you buy a home at a higher price but a lower interest rate you’ll have a cheaper monthly payment, and significantly less paid. That’s why Lech says, “What you’re seeing is a lot of the sellers taking advantage of that by selling and making a good profit from selling their house and using that profit to purchase their next house.”
Lech also tells 47 ABC, if you’re able to pay in cash, that’s the best option.
If you’re looking to buy a home right now, contacting a loan officer is a good place to start.