The economy has been steadily improving, which means that the once low interest rates are bound to begin going up. If you were considering the purchase of a new home, now is probably the time to do it. The interest rates on home mortgage rates will begin going up relatively soon.
Borrowing money in general has been cheaper than it ever was ever since the Federal Reserve began to slash interest rates as a response to the credit crisis back in 2008. In fact, the costs of borrowing money have been at record lows for a few years, making it a great time to obtain a mortgage. Unfortunately, mortgage rates are only going to go up as the economy continues its recovery. Even if you purchase when interest rates have only increased by one percent, that one percent will reduce your purchasing power by almost 11 percent! For example, say you can afford a loan of $400,000 at a 4 percent rate right now. If it’s 5 percent next year, you’ll only be able to afford a loan of $356,000.