What Increasing Colorado Mortgage Rates Could Mean for You
Data tracked by the National Association of Realtors shows that while interest rates don’t have a obvious influence on house prices, they do a have a long term effect on the volume of home sales. So what could the rise of mortgage rates do that affect you, the home buyer? A rise in interest rates not only affects the volume of home sales, but some buyers may choose to lower their home buying budget (buy a less expensive house), opt to take a chance on an adjustable rate mortgage, or even choose to hold off on buying a home in the hopes that interest rates will again lower in the future. Interest rates not only effect first time homebuyers, but can trickle over to repeat buyers as well. Those who already own a home and hope to sell it in order to buy another home may find themselves without buyers due to the rising costs. This in turn means that they can’t buy a home, bringing the market to a standstill until rates even out again. Interest rates can also effect home rentals. Some buyers who currently rent may find that the rising interest rates make renting a home more affordable than buying. While right now the rates are still low enough for this to not be true, the uncertainty of the rate market could make it a reality. This is one reason why you should consider a fixed rate. If you buy now, consider buying with a fixed rate so that if interests continue to climb, you will not be affected. But there is an upside. Eventually home prices will start to reflect the higher rates, coming down in price to even out the increase. This could mean for some great deals on homes. Buyers who purchase while the rates are high will have the option of refinancing their home down the road, when the rates lower again. The real estate market can change overnight, going from a buyer’s market to a seller’s market or vice-versa. Interest rates can drop or they can rise. If you are in the market to sell or buy, you need to be aware of what is happening and how it correlates to you. Our handy calculators are available for your use. They can help you make informed decisions and help you see how interest rates and different loan types can affect your financial standings. You will also find current interest rates available on our site. At the time of this writing, interest rates are favorable for the buyer, but that can change in the blink of an eye so if you are considering purchasing a home, don’t wait much longer to speak with a trusted lender about your options. Being informed is half the battle, and we want our consumers to be informed consumers.