Looking To The Future: What To Expect With Mortgage Rates
In today's society, everyone is looking to become a homeowner. It is one of the most effective ways to build equity. Unlike renting a home, the money paid every month helps to go towards the value of the home. As time goes on, homeowners slowly build up more and more equity until their home is paid off. In order to make a home more affordable, everyone also seeks a low rate mortgage.
In the past several years, mortgage rates have been all over the board. While the economy has been stumbling, rates were at an all-time low. Due to the low rate mortgage that people were able to qualify for, home sales were up around the country. Now that the economy is starting to turn itself around, mortgage rates are also starting to climb upwards.
The current mortgage rate is somewhat higher than it was in 2011, however it is not by much. As investments and stock markets continue to do well, mortgage rates will climb, which is what is expected to happen throughout 2012. As the mortgage rate continues to steadily climb upwards, there will be a direct relation to the number of mortgage applications received around the country.
Anyone who is looking for a new mortgage in 2012 needs to consider two things: the length
of the mortgage loan and their credit score. The length of the mortgage will help to keep costs down. The rate of a 30 year is higher than a 15 year mortgage. A 15 year mortgage now offers about the same loan rate as a 30 year loan did one or two years ago.
The current mortgage rate is still lower than it was in 2006 and the beginning of 2007. However, if predictions are true, the mortgage rates will continue to climb upwards every quarter for the unforeseeable future. This means that new mortgage applications will continue to slow down, which will ultimately leave more homes vacant and less people becoming homeowners.
In terms of purchasing a home, the mortgage rate is still under 5%, which can result in an affordable housing payment, depending on the cost of the home itself. Since there is still a significant amount of real estate around the country that is being offered due to a short sale or a foreclosure, the fact that the mortgage rates are on the rise are not going to impact mortgages too drastically.
Those who are considering buying a home should take advantage of a low rate mortgage now while there is still time. Waiting too much longer could result in a 30 year mortgage that is over the 5% mark, making it much more expensive to become a homeowner.