With a new government administration set to take office, the mortgage industry is in for some changes, which is to be expected with any new elected president. Since the election, Americans have seen an aggressive increase in mortgage rates, which are currently siting at their highest level since May 2014; that, along with the news that the federal reserve voted to raise interest rates, has borrowers wondering how the new changes will affect their lending options. However, fear of rising rates shouldn’t be a deterrent considering they are still reasonably low.
According to a survey done by Freddie Mac, last week the average rate for a 30-year fixed-rate mortgage was 4.13%, this week the rate rose to 4.16%. This time last year, the average rate was 3.97%. This means, if a borrower were to put a 20% down payment on a $241,000 home today, they’d only be paying about $21 more each month compared to what they would have paid a year ago.
Right now the fear of rising rates has painted a doom and gloom picture on the mortgage industry that is far from the truth. Rates under 5% have been the norm for the last decade, and we have quite a way to go before that changes. Perspective is key when examining rates, and by historical standards, rates are still looking great for 2017. Consider this, if interest rates were to increase another 25 basis points, the change in mortgage payments would be insignificant.
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