Worcester residents thinking about buying real property or refinancing the existing homes may be interested to learn that mortgage interest rates are migrating north from their historic lows set earlier this year. The chief financial officer for Well Fargo & Co., the nation’s biggest mortgage lender, does not believe that rising rates will slow down interest in buying homes, though Worcester residents with limited budgets may disagree.
Mortgage interest rates on standard 30 year loans have risen more than 1 percent since hitting their lows in May of this year. While 1 percent may not seem like a very big amount at first glance, 1 percent of a $500,000 home loan totals out to $5,000, which is more than some families are able to earn from income in several months.
The Federal Housing Finance Agency has also noted that housing prices are on the rise, which may mean that homeowners are gaining equity in their existing homes. People who already own their homes and who may want to refinance their mortgage loan terms seem to be holding off in the wake of the interest rate increase.
While higher home prices are good for homeowners and rising interest rates may mean more stimuli for the national economy, both factors may work against locals who are desperately trying to save enough money to buy their first homes. Even though rates and values have not elevated to the astronomical levels that they reached when the real estate market crashed nearly a decade ago, some prospective buyers may feel that they have missed their opportunities to get a good deal on a home.
As some buyers rush to buy real property before the market rises even more, others will hold off and continue to save their money for another rate drop. Mortgage rates and home valuation are just two of the many factors that make buying and selling real property a challenge and individuals who have questions about how to negotiate real property deals may consider speaking with legal real estate professionals about their rights and options for contracting.
Source: Worcester Telegram, “Wells Fargo CFO says rate rises won’t stall housing rebound,” Dakin Campbell, Sep. 9, 2013