Why it Might Be Cheaper to Buy Now

Mortgage rates are nearing the 5 percent mark, prompting many home buyers to rush to take advantage of rates while they’re still low. 

“Most people agree it is only a matter of time before rates hit 5 percent,” Peter Grabel, a mortgage loan originator at Luxury Mortgage Corp. in Stamford, Conn., told realtor.com®. “The housing market has clearly turned the corner in most areas. I think a year from now, people will look back and realize that this was a great buying opportunity.”

Some forecasts show rates could edge even higher to 5.5 percent or even 6 percent in 2014. The Federal Reserve has announced that it will soon start tapering its $85 billion monthly bond-purchasing program, which is expected to send mortgage rates rising from recent record lows. 

Currently, 30-year fixed-rate mortgages are averaging 4.2 percent, according to Freddie Mac. 

In a recent blog post, realtor.com® illustrates the effect of rising mortgage rates on buyers’ pocketbooks: 

  1. Example: A buyer gets a 30-year fixed-rate mortgage at a 5 percent interest rate on a $300,000 loan.
    Monthly payment: $1,610.46
    Total payment: $579,569.69
    Total interest: $279,769.69
  2. Example: A buyer gets a 30-year fixed-rate mortgage at 6 percent interest rate on a $300,000 loan.
    Monthly payment = $1,798.65
    Total payment = $647,515.44
    Total interest = $347,515.44

The buyer with a 6 percent interest rate would pay about $67,746 more over the life of a loan than the buyer who was able to get an interest rate at 5 percent. 

Source: “Buy a Home Now or Pay More Later?” realtor.com® (Oct. 8, 2013)

About Ady Simion (Realtor and Public Notary)

Ady Simion was named in the Top 1% of all agents for NRT LLC a subsidiary of Realogy that operates a variety of real estate offices under brands such as Coldwell Banker, Sotheby's International Realty, Century 21, The Corcoran Group, and the technology-based brokerages ZipRealty and Climb Real Estate. NRT has 787 offices and 47,000 sales associates. Selling and buying property can be very stressful but with the right agent it can be profitable and a fun experience. Ady is also a Notary Public and being a people person he wants to help negotiate for his clients making their transactions as smooth as possible. Ady’s goals are simple: He wants to be the best source of information on the Los Angeles area Real Estate market, as he assists clients through each transaction with care and professionalism. He is proud of his large referral base of clients who have placed their trust in him over the years. Why him, when there are so many good people out there?!?! • Sellers will have their property exposed to the largest team of sales professionals in the world by far. Coldwell Banker Agents sale more homes than anyone else. • Buyers will have the opportunity to view more properties exclusively. • And most importantly when you hire him you get a whole team working for you not just “only one person”. Ady Simion started his Professional Career as an Insurance Agent, and then mastered the Mortgage Industry focusing on helping buyers and sellers achieve their life dreams. He now is an Agent with the Largest Residential Real Estate Company in the nation and the world, Coldwell Banker, at the Pasadena office which is the leader in the areas in which he specializes. After finishing College Ady has consistently been a Top Producer in every office/business he worked at. He speaks English, Romanian and Spanish. Real Estate is constantly changing and working with an agent that has been involved in the Real Estate buying/selling process most of his life is always beneficial for clients. Call, text or e-mail him or just stop by to say Hi and ask any real estate questions you may have.

Posted on October 11, 2013, in Uncategorized. Bookmark the permalink. Leave a comment.

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