As it has throughout history, a new president in the White House means changes both politically and economically. We already saw an increase in mortgage interest rates in the last months of 2016, and experts predict that rates will continue to climb in 2017.
Homebuyers are affected in different ways, depending on goals and financial situation:
- If you’re looking at homes at the top of your budget and want to buy within the next year, then it likely makes sense to do so earlier than later, if the trend of rising rates continues.
- Mortgage rates may be of little, if any, concern to homebuyers who are paying cash for a new house or downsizing.
- Buying a home that is priced lower than what you can afford gives you some wiggle room in your budget for a slightly higher rate, or you could opt for an adjustable-rate mortgage (ARM), which would follow the market rate when it comes down again in the future. Keep in mind, an ARM also obligates you to pay the higher rate as it goes up.
Regardless of the recent slight increase in mortgage interest, rates remain at historically low levels, allowing buyers the ability to purchase more home for their money, or keep their budget in check. As always, the biggest factor contributing to your actual mortgage cost is not the market interest rate, but your own credit score.
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