While managing a Real Estate office I watched one of our agents work with some clients who wanted to buy a house and had received their pre-approval for a loan. The Realtor' assumption was this couple with their approval, were actually ready to make their purchase. Her clients continued to look for a house but unfortunately were dragging their feet, taking longer than what the agent thought they would take. The purchasers were first time home buyers, who would be buying an entry level house, which was really all that they could afford and in fact, barely qualified for the mortgage. Here is the kicker and something to always remember.

This couple failed to get locked in on an interest rate. In the interim, interest rates went up which resulted in a higher monthly payment. They no longer qualified for a house in the price range they had really planned to buy in because the additional interest would put them over the top of their pre-approved limit. They were forced to look for a house that was somewhat less than what they had previously thought they could buy. In their case they were nearly priced right out of the housing market.

Here is a simple truth to remember: Every time interest rates go up, the amount of house you or I can afford to pay for goes down. In other words, instead of being able to afford a $200,000 house, you maybe can only finance a property for $175,000. Why? The answer is simple: Let's assume that I am approved for a payment of $1,075 per month - a $200,000 dollar Mortgage at 5%. Interest rates rise to 6.5% resulting in a payment of $1264 per month for the same amount of house - $200,000. If I am eligible for a maximum payment of only $1075 then I will have no choice but to look for a property that costs less.

I would never say to anyone that this is the time for you to buy because only you, as a prospective buyer can determine the best time. On the other hand, you should be aware of the fact that interest rates are very low and we are still in a buyers' market.

David L. Burrows, Realtor^®
Envirian of Warrenton, Warrenton, VA 20186
Phone: (888) 673-7866 x119
Burrows Properties

Credit Tip: Always secure your Mortgage Pre-Approval before going out house shopping.

Seller Guidance: I would encourage you to employ a Realtor to help you sell your home. When your agent or another agent is showing your house, go away and let them do your work for you. I also urge you to utilize my FREE SELLERS TOOLKIT before selling your house.

Buyer Guidance: I would encourage you to really check out anything and everything you are told by a well meaning seller. Employ the services of a Buyer's Agent to help you discern what you read and listen to about the area you are thinking of calling home. I would also urge you to get my FREE BUYERS TOOLKIT before heading out on the journey to find your new house.

Try this link to help you find your next home: Fairfax Homes For Sale   When you land on the main page try one of our custom searches listed on the bottom of the page. No registration is necessary for the Fairfax MLS general search on my site. If you check the box to receive automated updates sent to your email, you will be required to give us your name and a valid email address.

Northern Virginia Information - Here you will find answers to your questions about schools, auto registration, taxes, things to do this weekend, popular destinations. It only takes a moment to look and it is free with no registration required!

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