I'm working with several preapproved buyers who are waiting for home prices to come down or for their perfect home to come on the market that's priced correctly...as they're waiting rates currently are going up. (I commend home buyers who are starting early with the preapproval process). With all of the inflationary data our economy is dealing with, I don't see rates heading back down in the near future. In fact, just over this past week, rates increased 0.25% alone.
If you were qualifed for a $2,000 payment last Friday when rates were 0.25% lower, you now qualify for $8,759 less in mortgage.
Mortgage rates so far this year have been as low as 5.000% to the mid 6's for a conforming 30 year fixed rate. Here is how much your mortgage amount will be based on a payment (PITI) of $2,000 at various rates for a 30 year fixed:
Rate = Loan Amount for a $2,000 mortgage payment (piti)
5.000% = $372,563
5.250% = $362,185
5.500% = $352,243
5.750% = $342,716
6.000% = $333,583
6.250% = $324,824
6.500% = $316,421
6.750% = $308,357
7.000% = $300,615
7.250% = $293,179
7.500% = $286,035
So far this year, if you consider the span (low 5's to mid 6's) between the 30 year fixed rate, there's a difference of $50,000 to loan amount based on a $2,000 payment will qualify for.
Where will mortgage interest rates be in the long term future? No one knows for certain however if we continue to have issues with inflation, mortgage rates will most likely continue to travel higher. Higher rates could be an argument for paying points...especially if the Seller is doing so.
