Do You Have the right Interest Rate?
During the last couple years many people have capitalized on low interest rates by refinancing their mortgage or by buying a house with an extremely low interest rate…often less than 3%!
So, what is your interest rate? If it is over 4%, you may want to talk with a lender to see if it would make sense to refinance. Earlier this year, the Federal Reserve laid out a plan to raise rates 3 times this year and many experts predict rates will go to 4% or perhaps higher by the end of the year. **However, on Jan. 31st, the Feds back pedaled slightly and said they will raise rates in March but are now undecided about the remainder of the year.
We have really been spoiled in the past few years with such low interest rates. To put things in perspective, here are the average interest rates over the past 4 decades…..In the 2010’s the average was just over 4%, in the 2000’s they averaged 6.3%, the 90’s were at 8.1% and the 80’s saw rates over 12%! If you ask me, we are still doing pretty well with rates currently between 3-4%.
Even though rates are still historically low, if you are planning to buy a house, the change in interest rates does change your buying power and monthly payment. As an example, using the average price in the St. Louis area of $250,000, a buyer with an interest rate of 4% will pay approximately $150 MORE than a buyer whose interest rate is 3%.
To review: Whether you own a home now or you’re thinking of buying, NOW may be the best time to review your interest rate. If your current interest rate is over 4% it may be time to refinance, and if you’re buying, you may want to speed up the process to capitalize on interest rates before they go up!
If you have any other questions about this or any other real estate related topics, I’d love to discuss with it you and make a plan if you desire because you are the Heart of our business!