While 2017 watched home prices increase throughout most of New Jersey (up 8.1% in Union County), home buyers caught a break as mortgage rates increased far less than anticipated – hovering near historical lows for most of the year before climbing to just under 4% by year end.
However, analysts at the Mortgage Bankers Association (MBA) and other leading economists predict that 30-year fixed rates could reach nearly 5% by the end of 2018.
Here is how a rate increase with modest home appreciation can impact a monthly payment;
|Year / Price||Rate||APR||P & I Payment||Change|
|2016 – $375,000||3.50%||3.572||$1347.13||—|
|2017 – $405,000||4.125%||4.201||$1570.27||$223.14|
|2018 – $415,000||4.875%||4.201||$1756.97||$409.84|
While it’s difficult to predict the future of interest rates, the Spring Real Estate Market is sure to bring about one thing – competition! Multiple bids are still very common, especially in areas within commuting distance to New York City.
If your goal is to purchase a home in 2018, home buyers should consider obtaining a full loan approval well in advance of their purchase. Unlike a pre-approval or pre-qualification, a full loan review virtually guarantees the loan commitment will be issued by your lender. Besides helping you prepare for your financing ahead, a full loan approval shows the seller that you are a serious buyer.
“With American United’s Approval First Program, we position our clients to be highly competitive buyers that can close quickly,” states Joseph Farella, Executive Vice President of American United Mortgage Corporation. “It’s a strong position you can’t afford to be without in today’s competitive real estate environment,” Farella adds.
For questions, comments, or to review your home buying options, Mr. Farella can be reached at 908.322.5423, or by email at: email@example.com