Mortgage rates shot up sharply this week. The benchmark 30 year fixed rate mortgage was at 5% according to one survey of national lenders. The current rates, while still low by historical standards, are at the highest level in seven months. Consumers looking at refinancing an existing mortgage are hearing the wake-up call and locking loans. They realize while they may have missed the bottom the smart thing to do is take the money and run if the numbers justify it.
A savvy first-time buyer I have been working with is not concerned about the increase in rates. She correctly analyzed the numbers and found that the difference between 4.5% and 5% on her projected $200,000 thirty year fixed rate mortgage was about $60 dollars a month. She feels because of less competition when she bids on a home she will easily come out ahead with a lower selling price or increased seller concessions.
My crystal ball is cloudy and I have no clue what direction interest rates will go or how far they will move. Frankly, no one else knows either or they would have made a fortune playing the market on interest rates.
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