I have some news about mortgage rates which might have a direct impact on your immediate real estate plans.
Most recently, mortgage rates have risen by .5%. This spike is likely a preview of what’s to come. While rates are still low, the uptick will make a difference in mortgage payments and approvals.
A few things to consider:
- Your debt-to-income ratio, used primarily for mortgage pre-approval, will increase as rates increase. This may impact how much home you can afford. You’ll need to talk to your lender to make sure your expectations for a purchase price square with any rate increases.
- If you have a home equity line of credit (HELOC), it is tied to Prime rate. The Fed has signaled it is considering a modest increase in the Prime rate soon. As this rate increases, so will your payments.
- Don’t wait to refinance. These long-term low rates have lulled us into a sense of complacency, and this has made refinancing a low priority for many homeowners, believing they can put off the work of refinancing. Now is the time to move.
For a deeper look at what’s influencing the current rate increases, I recommend this article:
My main concern is that you have all the information available to help you make the best decision possible. Are there any North Metro Denver real estate moves you want to discuss sooner rather later?