After increasing to over 5% in late December of 2010, mortgage interest rates ranged from 4.75% and slightly above 5% throughout the first quarter of 2011.
Whether buying or selling a home in Iselin, New Jersey or Colonia or Edison, in Middlesex County or in any other State, the movement of mortgage interest rates should be of interest. A simple change from 5% to 5.25% in a mortgage rate for a 30 year loan for $200,000 is $30.77 per month in the monthly payment, and $46.15 for a $300,000 loan. View a mortgage calculator for the calculations you would like to look at.
Is this move to over 5% a sign that rates are moving up? There will be lots of opinions on the near term future direction of mortgage interest rates. However, here are two simple facts. It is Spring now, and year after year, real estate home buying activity increases during the Spring. Second of all, home buying activity has increased! There is more buyer activity, there are more under contract transactions and there are more multi offer situations on various various properties. Do you think these two factors can give you some insight?
Mortgage interest rates not only affect home buyers, they affect home sellers as well. If rates increase, a home buyer’s mortgage payment will increase. And since income and down payment generally remains the same, the amount to be mortgaged must also be lowered and naturally the the price range to purchase drops. A true domino affect!
There is only so long that mortgage interest rates can remain at or near historically low levels! What are your thoughts? I would like to know!