If you are a buying a home in Ann Arbor, give your lender a quick call to verify your Pre-Approval.
Why Should I Get Pre-Approved Again?
When a lender qualifies you for a home purchase, they look at your debts, income, credit scores and the interest rates to give you an amount of a new mortgage you will qualify to finance.
Rates have jumped .75% the last 6 weeks. Give your lender a quick call to verify you are still qualified for that amount.
Example of the Difference in Payments
Here is an example of how your payment can change based on the % of interest you will pay.This is based on a $200.00o loan with 3.5% down. This example is an FHA loan. More and more homeowners are using FHA loans to finance in Ann Arbor especially first time home buyers.
Back in mid-November rates were approximately 4.17%.
Today they are between 5 and 5 1/4%
In November if you purchased your home at the 4.17% rate with 3.5% down, your monthly payment would have been $940.43, principal and interest.
Today if you purchased that same home at 5.00%, with 3.5% down, your monthly payment would be $1036.06, principal and interest.
Now to many folks, this payment of almost $100.00 more will not make any difference but to some $95.63 a month could change the price of the home you can afford to purchase.
Predicting the Future
I don’t have a crystal ball to tell you what is going to happen to interest rates in the next few months, but .75% jump in 5 weeks is a strong indicator that interest rates will rise.