You may or may not have noticed but interest rates are on the rise. We have been in a low interest rate pattern for so long that there’s really no where to go but up. It’s been a whopping seven plus years that rates have been at historical lows. While the party isn’t over yet, we do see people grabbing their coats, paying their tabs, and heading for the exits.
From January 2015 to June 2015 interest rates on a 30 year mortgage rose from 3.7% to 4.2%. As of this writing, rates are hovering around 4%. Now, before you panic too much it’s going to take a little time before we get back to pre-recession rates. According to many experts a 6% rate is “normal”, but the same experts agree that it will take until 2017 to get to 5.5%.
Of course these are predictions, but we’ve been hearing from all over that this is the direction we are headed. If you are on the fence of buying a home or refinancing a mortgage, now would be a really good time to go ahead and lock in on a good rate.
Because of rates being so low, the option of buying vs renting has been in favor of buying. Owning a home has numerous advantages when it comes to long term investing and wealth accumulation. When interest rates rise it make the decision of renting vs buying a little fuzzier.
Here are some pros and cons of renting vs buying.
Reasons to rent
- Career uncertainty
- Income uncertainty
- Bad credit
- No maintenance expenses
- Utilities (sometimes) included
Reasons to buy
- Tax deductions
- Creative control
- Maintenance choices
- Sense of pride (ownership)
- Locked in payments
While we are all in different stages of life, owning a home has for the most part always been a good investment. Keep more of your hard earned money by locking into a low interest rate soon. You never know what they will be this time next year.
If you are looking to buy a home and need some help figuring out how to get locked into a good interest rate, let one of our qualified local agents help you start the process.