The price of the home you buy is one thing. The cost of your mortgage is another. It is important that Wisconsin homebuyers realize that they have access to two really good things right now: lower prices and lower interest rates. Combined, this makes for an opportune time to buy. Buying while home prices are low and interest rates are low and holding long term means you will be saving greatly on the long term cost of owning a home and potentially see higher gains when you sell, presumably at a time that would be considered a seller’s market.
So if mortgage interest rates have such a large effect on the cost of the home, where are they headed?
No one really know what interest rates will do , but 4 major entities project their opinions of where interest rates are headed. Those entities are The National Association of Realtors, Fannie Mae, Freddie Mac and PMI. The chart below from the KCMBlog shows their predictions through the first quarter of 2012. They all see interest rates rising almost a percentage point.
If you’re thinking of buying, but want to wait it out to see what happenes to home prices, your mortgage costs look like they will be going up. What would happen to your mortgage payment if the interest rate rose – and not even a whole percentage point? On a $170,000 loan in the below example, it would cost you almost $90 more a month x 12= $1080 x 30 years= $32,400. The point is, if you are on the fence about buying a house in Wisconsin, you’ve got a lot going for you right now. Talk to a loan officer or a Realtor to begin your search and take advantage of the home buying environment we have right now. Take a look at firstweber.com for real estate all over Wisconsin and see what your money can buy today.
Source: KCM blog
And one more thing – even though we mention the cost factors in a buyer’s favor right now, cost is not even one of the top 4 reasons people buy real estate, says Fannie Mae’s National Housing Survey.
Here are their 4 main reasons for owning a home:
1. It means having a good place to raise children and provide them with a good education
2. You have a physical structure where you feel safe
3. Allows more space
4. Gives you control over your living space.
If you’re ready to buy real estate in Wisconsin and settle down, the current cost situation can be the icing on your cake.
Thank you for reading the First Weber Wisconsin real estate & Wisconsin living blog for information on how mortgage rates affect the cost of homeownership in Wisconsin.