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Will 2016's Stellar Mortgage Rates Continue?

Will 2016’s Stellar Mortgage Rates Continue?

In 2016, the housing market made an impressive comeback — houses were increasing in value, mortgage rates were decreasing, and the market took huge steps towards stability. I’ve talked about two of these in a previous post, but I thought that today I would take the time to tackle the question of mortgage rates, as these rates are a key to how pundits evaluate market health and are incredibly predictive of whether now is a good time to sell or buy a home.

2016 saw mortgage rates hit a low that was very encouraging to those looking to buy homes. Lower mortgage rates means you are paying less money to borrow the money you need to buy a home. Therefore, having a lower mortgage rate means you are in effect paying less to buy your home, because the amount you are required to pay back on the money you borrowed is less.

**Also, it’s important to note that even a fraction of a percentage shift in mortgage rate can have a huge affect. This is not the difference between a 4% tax on a $20 tshirt and a 4.5% tax. That .5% increase in a mortgage rate is going to wreak havoc on your monthly payments, because the interest you will be paying is on an initial figure many many times great than a $20 tshirt (unless for some reason you’re mortgaging a dollhouse). 

While the mortgage rates in 2016 were quite favorable, there is no guarantee that these rates will remain for long. In fact, it is expected that mortgage rates will rise in 2017 pretty quickly, and with one month of 2017 behind us, it can be expected that rates will rise sooner rather than later. If you were looking to sell your home and invest in one which more fits your lifestyle/family/etc in 2017, I’d advise you to do so quickly. Holding out on selling your current home and buying a new one could cost you thousands upon thousands of dollars in interest fees.

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