With Interest Rates on the Rise, the Time to Act Is Now

Tammy Zambito of Freedmont Mortgage is here with me today to discuss the impact of rising interest rates.
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I’m here today with Tammy Zambito, a local mortgage professional with Freedmont Mortgage, to talk about the rising interest rates in the market.
Tammy, interest rates have started to rise since the beginning of 2018. What do those numbers look like, and how does this affect buyers?

Well, mortgage rates are based on how mortgage-backed securities are trading on Wall Street. They’re not one-size-fits-all. Risk-based pricing comes into play—the lower the credit score, the greater the risk to a lender. This means that your interest rate will be a little bit higher if you have a low credit score.
On an FHA loan with a rate between 3.75% and 4.5%, your interest will equate to almost $24,000, showing the difference between having closed in December versus closing now.
We have seen interest rates go up almost 0.75% since last year. If your debt ratios are tight to begin with, that could make the difference in your ability to qualify for a loan.
Rates are projected to inch up because of inflationary fares. For example, if a buyer qualified for a $200,000 house in 2017, where the rates were around 3.7%, they would have had much more buying power than in today’s market, where rates are around 4.5%.Spikes in interest rates could affect your ability to qualify for a loan.For buyers, the takeaway is that time is not your friend right now. If you’re thinking about buying, now is a better time to do so than waiting for a year. We don’t know what prices and buying power you’ll see if there are more significant rate jumps. Even where the rates are now, they’re still very low, so get off the fence.
If you need any help getting started or have any questions, please feel free to reach out to me. I'd be happy to help you.