With these higher rates you won’t get approved for as much.
Waltham, MA (PRWEB) May 29, 2013
McGeough Lamacchia Realty reports interest rates for a 30-year fixed loan have gone up over the past three weeks.
According to the Freddie Mac Weekly Survey released May 23, rates for a 30-year fixed mortgage have gone up from 3.35 percent the week of May 2nd, to 3.42 percent the week of May 9th, to 3.51 percent the week of May 16, to 3.59 percent the week of May 23. Today, the interest rates reached 4.0 percent.
The average rate for a 15-year loan jumped to 2.77 percent for the week of May 23, up from 2.69 percent the week of May 16th, and up from 2.61 percent the week of May 9th.
Interest rates are still holding at record low levels. John McGeough and Anthony Lamacchia, co-brokers and owners of McGeough Lamacchia Realty, say the low rates have helped to boost home sales and have helped the housing market improve, but say these interest rate fluctuations will have a huge impact on home buyers.
“A month ago, when the average conventional rate was at 3.25 percent, a monthly payment on a $350,000 loan would be $ 1,523,” says Anthony Lamacchia. “With today’s rate of 4.0 percent, the monthly loan would jump to $1,671, a difference of $148 a month.”
McGeough Lamacchia recommend that if buyers got pre-approval for a certain amount a month ago, they should go back to their mortgage broker to see how these higher interest rates change their mortgage payment and what they can afford.
“With these higher rates you won’t get approved for as much,” says Lamacchia, “For instance, if you were approved for a maximum of $350,000 a few weeks ago, at today’s rates you would now be approved for a maximum of $325,000.”
McGeough Lamacchia say people selling their homes will be affected by this increase as well.
“If you are selling your home for $350,000 and you receive an offer on your home,” says John McGeough, “you’d have to make sure the buyer locked in the lower interest rate. If not, you may want to ask your buyer to get approved again. It is possible that the new approval may be at a lower amount that isn’t enough to cover the price of the home. This is typically more likely to happen for people who are putting down less than 20 percent because the numbers tend to be tighter.”
McGeough Lamacchia says homeowners can put down a larger down payment on a home to get better interest rates.
About McGeough Lamacchia:
John McGeough and Anthony Lamacchia are the number one Real Estate Agents in Massachusetts and named one of the Top 100 Real Estate Teams by the Wall Street Journal in 2010. They are a full service real estate agency serving home buyers and sellers Massachusetts and New Hampshire.