One of the important factors when considering how much house you can afford when you’re looking at new homes in Oklahoma City is the current mortgage rate. Lower rates make it easier to purchase more home, while higher rates quickly limit your choices. Rates change according to a variety of global and financial issues, so it is important to be aware of what is happening with the rates if you’re considering purchasing a new home.
Rates are hovering around a three-year low right now making it a good time to purchase a home. If rates start to rise, the maximum loan amount buyers qualify for will decrease and they will have to find other ways to get that maximum amount, such as a larger down payment, an adjustable rate mortgage, or a non-occupant co-borrower. If these aren’t an option, the buyer will have to look at houses in a lower price range. The difference resulting from higher mortgage rates can mean a smaller home, one less bedroom, or a shift in desired school districts, which are all factors that play a significant role in people choosing to purchase a new home in the first place.
In addition, home values are starting to rise across the country. A $300,000 home today could be worth $320,000 by the end of 2017. If you wait to purchase until later, you not only are faced with a more expensive home, but also the likelihood of an increased mortgage rate, which could lessen your buying power when you need it most.
While many economists have differing ideas as to what the rate increase will be like in 2017, most seem to expect rates to hover around where they are to start, with perhaps some small increases, depending on economic growth and other factors. Still, even a small increase can have an impact on how many new homes in Oklahoma City buyers can afford. Most economists don’t expect the rates to drop lower than they currently are, so waiting to purchase becomes a gamble.
Ultimately, with rates as low as they are, and with home prices already starting to increase, it is better to lock in the low mortgage rates available now rather than wait and risk an even greater increase. By making the move now, you also are able to pay more toward the principal rather than having much of the payment go toward interest. Take advantage of the current low mortgage rate and invest in a home that will meet your family’s needs and hopefully turn into a solid return on investment.