Waiting to purchase a home could prove costly for home buyers

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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:  joe@americanunited.com

Payment based on purchase of single family home with  20% down payment. 740+ credit scores and for qualified applicants only.  Rate and market chart is for illustrative purposes only.  Interest rates and home prices are directed by market and economic conditions that can change at any time.
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