Is Now The Time to Get Off the Fence Post?
Mortgage rates are at their highest levels in more than four years and interest rates are forecasted to move higher in the coming months. If your thinking about buying a home in Honolulu Hawaii it might be in your best interest to step up the home search process as rising mortgage rates could have a big impact on what you can afford and ultimately where you can afford to live.
Forty-four percent of home buyers say rate increases will likely force them to settle for a smaller, less expensive home that requires a longer commute to their jobs, according to a realtor.com® survey. Commute times can drastically affect the quality of life, however, in the metro Honolulu area, square footage is at a premium and 2 and 3 bedroom homes are often priced at over a million forcing many to search for housing options further from their place of employment.
The 30-year fixed-rate mortgage averaged 4.46 percent last week, according to Freddie Mac, expected to increase, the Federal Reserve said it is likely to raise its short-term interest rates this year. In turn it could prompt mortgage rates to move even higher. “Every time the interest rates go up, you eliminate a group of people who can no longer afford to buy a house,” Don Frommeyer, a mortgage broker at Marine Bank in Indianapolis, told realtor.com®. Here in Honolulu the fall out often results in locals having to move off island in order to find more affordable accommodations.
On a $300,000 house with a 30-year fixed-rate mortgage and 20 percent down payment, the difference between a 4 percent and 5 percent mortgage rate is $142 a month. Calculated over the life of the loan, that is more than an extra $51,000. Rate increases, even minor ones, can add up over time. Home buyers who are concerned about rising rates may want to lock in with a lender, which guarantees the current rate for a set period of time. It typically costs several hundred dollars to lock in a rate.
For expert buyers representation in Honolulu contact HI Pro Realty LLC TODAY!
Source: “Is It Last Call for Low Mortgage Rate? Why Home Buyers Should Act Now,” realtor.com® (March 7, 2018)
Comments(3)