Well, hopeefully you've taken advantage, or will be taking advantage of the lowest mortgage rates in about 50 years. For the past 16 months the Federal Reserve has helped keep rates low-around 5% for a 30 year loan - by purchasing mortgage backed securities. But that program was scheduled to end in March, and private investors aren't expected to step in to fill the void at the same low rates. As a result, the consensus among economists is that rates will climb to between 5.3 and 6% by year-end. So if you're in the market for a new home, and your area is expecting a 5% or less drop in the next year, then locking in low rates now will probably be more valuable. For example, if you take out a $300,000 30-year loan at 5% today will cost $1610 a month. If you wait until the end of the year, and maybe you can land the house for $15,000 less. But by then rates may have climbed to 5.75%, so your momthly payment will be $50 more, and you'll pay almost $34,000 more in interest over the life of the loan.
Comments(0)