Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for Realtyman1

As a Buyer The Mortgage Rate Change Could Hurt You

Cheap mortgages cannot last forever and years from now there is a good chance home buyers will look back at today's super-low rates.  More expensive mortgages will hurt the already lousy housing market.  Refinancing drove consumer spending before the crisis and it can still save homeowners a lot of $$.  The last quarter of 2011 had $281 billion in refinancing yet $79 billion below a year ago when the rates were higher.  Remember that when rates register a lasting rise, be prepared for another nasty side-effect of low rates...the impact of each percentage-point increase on payments seems more painful.  That is one more reason we will remember the good old days of low rates.
  • March 29 2012 - Spokane
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (5)

Are you saying "buy now?"
  • March 29 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
Low rates are great, but buyers have to seek value and not just focus on the rate alone. Many people who bought in the last 2 years with a low rate could not sell for what they paid.

Their low rate may help them monthly, but their house value has been negatively impacted because the market is still working the bubble values out of the mix.
  • March 29 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for shapiroamg
Is there a question in there?

  • March 29 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I truly have no idea what you are saying. Sounds like you're just talking or you are saying something so obvious like "buy low sell high".
  • March 29 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for the_country_hick
Low rates only create higher house prices. Once interest rates normalize people will be wondering why they bought at such a high price when rates were so low. They could have bought the house much cheaper with higher interest rates.

A person only has a certain amount of money a month to spend on a house. Consider what effect interest rates have on a person who only has $500 a month to spend on their mortgage (not including taxes, insurance etc.)

A 30 year $106,000 mortgage costs $493.91 a month at 3.8%.
A 30 year $100,000 mortgage costs $491.94 a month at 4.25%.
A 30 year  $82,000 mortgage costs $491.63 a month at 6.00%
A 30 year  $69,000 mortgage costs $494.32 a month at 7.75%
A 30 year  $56,000 mortgage costs $491.44 a month at 10.0%
A 30 year  $48,000 mortgage costs $493.73 a month at 12.0%
A 30 year  $39,000 mortgage costs $493.13 a month at 15.0%

Can you imagine all of the extra money recently printed causing major inflation? I can and so can many economists. The only cure for inflation is higher interest rates to suck that money back out of the economy. Those higher rates will push house prices lower to meet the ability of people to pay them.

I would rather buy a house at 15% interest instead of 3.8% for obvious reasons. You can always prepay principle and cut down what you owe quickly. You also greatly reduce the interest you owe by paying off more than just the mortgage each month.
  • March 29 2012
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.