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Friday, 20 May 2011 11:45 |
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Realtors and Mortgage Lenders often talk about the COST of buying a house vs. the PRICE of the home. The price obviously is a major component of the cost.
The other major component of the cost of buying a house is the interest rate on your mortgage. A small hike in mortgage interest rates can have a dramatic impact on your monthly payment. For that reason, we try to keep you current on what is projected for rates in the future.
Two important agencies that project interest rates are Fannie Mae and Freddie Mac. The graph below shows what they are forecasting for the next year.
Obviously Fannie Mae and Freddie Mac don't have a crystal ball...as Mike would say. But they do base their predictions on factors like the Census, Labor Bureau Statistics and Economic Indicators, among other things. Which means they're making an educated guess; yes, a hypothesis. And that hypothesis is that rates are going to increase. Well, we all know that rates can't stay
low forever - economics just doesn't work that way. What we would like you to consider is this: if you are thinking about buying a house and are waiting to see what will happen with prices, keep in mind that interest rates can greatly impact your housing cost as well. As rates go up, so does your payment...even if home prices stay the same.
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