Today’s housing market splits into four distinct types. You’ve got cash buyers, buyers financing a purchase, owners who feel locked into a low rate, and builders with homes to sell.
Good Rule of Thumb for Interest Rates
Dated: July 18 2022
Views: 82
I've received a lot of questions lately related to interest rates going up. The most common is - "what do higher rates mean for me?"
The reality is these higher rates have a very real impact on our borrowing power. As a general rule of thumb, for every 1% increase to the rate, our borrowing power is reduced by about 10%.
Take, for example, a person who has been pre-approved for a loan up to $650,000. If rates have increased by 1% since the pre-approval occurred, the person might now qualify for $585,000 and have the same estimated mortgage payment.
Conversely, as a seller, this may also reduce the number of prospective buyers who might qualify for a loan to purchase your home. Listing a home at the right price is critical to ensuring you receive maximum exposure and interest. During the listing process, we will discuss your goals and objectives and price your home appropriately to help you meet those goals!
It's important to understand that this does NOT mean the sky is falling. I've got good relationships with lenders who have programs to assist prospective buyers in qualifying to purchase the home of their dreams. I'm happy to connect you with one of them and make sure your questions are answered!
Please reach out if you'd like to discuss this topic (or anything else) in more detail!
Ryan Sedgwick
My Commitment to YOU!Navigating the world of real estate can feel overwhelming, but you don’t have to face it alone! I’m here to transform the experience of buying or selling your home int....
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