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Purchasing Power ? How sitting on the fence in a raising rate market can hurt you.

March 28, 2018

 

By Rick Schlager, Area Manager/Senior Mortgage Loan Officer

Marketplace Home Mortgage, LLC

 

Purchasing Power – How sitting on the fence in a raising rate market can hurt you.

 

Buying a house is a big decision.  Often it is the largest purchase you will make in your life.  But when is the best time to buy?  That is a tricky question that can often be influenced by internal factors (your current situation or personal motivation) and external factors (rates or type or market.)  Consider the following graph:

  

 

From a buyer’s standpoint, a 1% increase in interest rate can lose you $40,000 on the purchase price.  That could be another bedroom, a new kitchen or a swimming pool.

 

From a seller’s view waiting to list to get the best price you can, with rates raising they potentially reduce the pool of borrowers able to afford their home.

 

Why wait?  Carpe Diem!

 

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