Mtg Interest Rates Increasing What Does It Mean To Me In Dollars And Cents

Dated: 02/13/2018

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Mortgage Interest Rates increasing, What does it mean to me in dollars and cents ?

Recent stock market drop was reaction to anticipation of quicker interest rate increases, see excerpt from The New York Times 2/6/18

How Deep Is the Hole the Stock Market Just Stepped In?  What started this panic?

Nearly all the economic news has been good in recent weeks, but in the often-neurotic world of investing, the news has perhaps been too good. Two reports last week that wages are growing at a solid pace, for instance, helped prompt the latest selling. Investors fear that an increase in wages, especially at a time of low

unemployment, might lead to higher inflation, which in turn could prompt the Federal Reserve to increase interest rates more quickly than expected.

Higher interest rates result in higher monthly mortgage payment or if you are limited to a specific monthly payment amount then a reduction in the loan amount/cost of home you can qualify for.

Each 0.25% increase in interest rate, the monthly payment goes up approximately $21 per month for a $150,000      loan, goes up $50 per month for a $350, 000 loan. If the monthly payment you qualify for can not be increased then the  loan amount/purchase price you qualify for will decrease by $4,000 (ex. $150,000 to $146,000), at higher loan amounts the decrease is around $10,000 (ex. $350,000 to $340,000). (No other factors affecting your rate qualification are included). Interest rates have already moved up around 0.75% since last year and we could see another 1.0% or more this year. However rates currently are still historically low. Consider taking advantage while you can, buyers to keep mortgage cost down, sellers so more buyers can qualify at your price point.

Please contact me to further discuss your needs to buy or sell.

Don Rochelle  210-389-7598   [email protected] at  EXP Realty, LLC.


Loan Amount

Interest Rate

increase

Monthly Mtg

Pmt increase

If limited to a specific monthy pmt then qualify for a lower loan

amount/purchase price, decrease of

Example New

Loan Amt:

$150,000

0.25%

$21

$4,000

$146,000

$200,000

0.25%

$29

$6,000

$194,000

$250,000

0.25%

$36

$7,000

$243,000

$300,000

0.25%

$43

$9,000

$291,000

$350,000

0.25%

$50

$10,000

$340,000

$400,000

0.25%

$57

$12,000

$388,000

$450,000

0.25%

$64

$13,000

$437,000

$150,000

1.00%

$89

$16,000

$134,000

$200,000

1.00%

$119

$22,000

$178,000

$250,000

1.00%

$149

$28,000

$222,000

$300,000

1.00%

$178

$33,000

$267,000

$350,000

1.00%

$208

$39,000

$311,000

$400,000

1.00%

$238

$45,000

$355,000

$450,000

1.00%

$267

$50,000

$400,000

Figures above are approximations based solely on a standard math calculation of monthly principle and interest using a 30 year amortization and do not included any other factors that affect your qualifying interest rate. Don Rochelle and EXP are not acing in capacity as a mortgage brokers or financial advisers, these estimates should be discussed and verified with your mortgage and finance professionals and are presented only to assist you with approximating how interest rate  changes can affect you when purchasing a home.

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Don Rochelle

Don Rochelle’s extensive real estate experience started upon getting a Masters in Business Administration with an emphasis in real estate in the 80’s and working in commercial real estate in Texas....

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