SELLER BEWARE. RISING INTEREST RATES COULD HIT YOUR SALE PRICE
An up-tic in mortgage rates is a seller penalty too, discouraging buyers, with harder negotiating and lower sale prices as buyers try to hold the line on their monthly payment… the cost of borrowing.
We have the lowest mortgage rates in decades. If interest rates kick up by year end, sellers will share the cost with buyers that pull back on the purchase price. How else to pay a higher monthly payment? For seller moving on to a new opportunity, the rate could rise; as a buyer or seller. To outsmart the market, have three plans; if I buy, if I hold, if I sell.
WHAT DOES $1,000 A MONTH BUY; 1985, 2000, 2016, and 2017?
If $1,000 a month is a goal, your next investment might have to come down $100,000, using the 8.12% rate of year 2000.
TIP OF THE WEEK IS ‘MAYBE IT WON’T CHANGE’.
By the end of 2016, if we see the 10-year Treasury note rate at 1.4%, just slightly below where it is now, by the end of 2017, it should rise a tad to about 1.6%. If so, expect the average 30-year fixed rate mortgage to stay at a low 3.5% through next year, with some rates below that. Homeowners should check to see whether it is worthwhile to refinance yet again. Source: Federal Reserve