Right after the election results, our country went just a little nuts it seemed… regardless of which side you were on, it seemed the posts on Facebook especially were getting a little out of hand. One article I did find of interest, which I shared (click the Facebook symbol above to see the post from that day with the comments from lender friends of mine) had some interesting predictions how Trump becoming President will effect our Real Estate market and we are already seeing one of those coming true with rising mortgage loan interest rates. One comment to my post in particular made by Dillon Mcdonald of Alliance Home Loans I felt gave credence to some of the predictions. Dillon not only commented that day but followed up with me the following information as well that I thought was worthy of sharing:
We have lost over 200 basis points on the secondary market (Formally known as the MBS - mortgage backed securities) since November 1st. This translates to roughly .5% to .75% higher for 30 year fixed interest rates. Depending on the details of the loan we were quoting mid 3% range previously but rates now are in the low 4% range.
This same subject actually reminds me of a blog I wrote 6 years ago, somewhat on this same topic… http://integrityallstars.com/are-you-currently-renting-now-really-is-the-time-to-buy-get-off-that-fence-before-you-miss-the-bus/ (I also talk about there the tax benefits of owning vs renting besides the difference in payment when rates rise. Ironically, the rates are very similar today to what they were 6 years ago when I wrote that blog, but not the prices…)
What happens is, as the rates go up, the amount of home one can qualify to get a mortgage loan for will decrease. When you’re out house shopping, it can get pretty stressful when rates are on the rise, especially when locking them in only can happen once you’ve contracted for a home. We do recommend making your move as a result sooner than later for sure as what we are hearing, no one is expecting them to go down again anytime soon.
Please give us a call at 480-243-4242 if you or someone you know may be in need of help soon!