Our sources say rates are going up in 2010! How much and when? According to experts in the mortgage industry, rates will start the year just above 5% and will gradually climb into the 6 1/2 range as the year progresses. Why? One of the main reasons is the expiration of the Federal Reserves Mortgage Backed Security Purchase Program at the end of March. This program was instrumental in keeping rates artificially low in 2009. So as the program winds down, rates will likely edge higher as we get closer to summer.
For buyers, this means their dollars will buy less house as the rates inch upward. How much does a rate change really affect a monthly payment? Here's an example from the e-Book, Only 8 Steps to Home:
For the last twenty years, the mortgage interest rate averaged approximately 8 percent in the United States. For the same $1000 monthly payment, a buyer can afford $30,000 more house at a 6% rate vs 8%.
Rates aren't expected to increase quickly, but they will most likely be volitile throughout 2010 with waves of ups and downs and a trend that is clearly up. So if you're considering purchasing a home, now may be a great time to seriously consider taking the plunge.
Visit our website to download the e-Book "Only 8 Steps to Home" or see how to get your own print copy of "Your First Home, The Proven Path to Home Ownership".
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Unless otherwise noted, blogs are authored by Tonda or Steve Hoagland