Younger Homeowners and Homebuyers Are In For A Real Shocker

One of the biggest challenges in today’s mortgage industry is that interest rates have been low for a long time – 5% seems almost normal. Many younger home buyers and home owners haven’t seen interest rates above 6-7%. It seems as if we almost expect interest rates to hover around 5% for infinity.
Do you find yourself apathetic, comfortable or complacent about your concern for interest rates when it comes to refinancing your mortgage or buying your next home? If so, you may want to step up your efforts to get your refinance or home purchase underway.
All indications are pointing to an upswing in mortgage interest rates as the Feds are expected to cease buying mortgage backed securities at the end of March 2010 which is predicted to start an increase in interest rates.

Mortgage Problems If Interest Rates Go Up

If and when interest rates go up, and you have been sitting around waiting for something to inspire you to start the mortgage process for real, you may wait yourself out of a mortgage.

On a $200,000 mortgage, a 1% increase in interest rates from 5% to 6% your payment will go up: $116 per month and it will cost you an extra $45,164 in finance charges over the course of your mortgage.

Not many of us are flush with cash and income with little debt to give extremely low debt to income ratios. If you are close with your debt to income ratio in today’s interest rate environment, you could be pushed out of being able to qualify for a mortgage based on exceeding acceptable debt to income loan requirements.

The Bottom Line About Mortgages In 2010
If you have not checked with a loan officer about your options or talked to a real estate agent lately you may want to start talking – time is running out. Oh and by the way – so is the opportunity to get $8000 housing tax credit money from the IRS for buying a home.