How Much Of A Home Can You Afford? Interest Rates Do Matter

how-much-home-can-you-afford-2_10-3-2016

Update — Mortgage rates as of December 29, 2016, per Freddie Mac

  • 30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.5 point, up from last week when it averaged 4.30 percent. A year ago at this time, the 30-year FRM averaged 4.01 percent.
  • 15-year FRM this week averaged 3.55 percent with an average 0.5 point, up from last week when it averaged 3.52 percent. A year ago at this time, the 15-year FRM averaged 3.24 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.30 percent this week with an average 0.5 point, down from last week when it averaged 3.32 percent. A year ago, the 5-year ARM averaged 3.08 percent.

On Thursday, September 29th, Freddie Mac reported 30 year fixed-rate mortgages(FRM) hit a 10 week low, dipping to an average of 3.42%. We also saw a slowing in the greater Seattle area housing market last week, resulting in balanced markets in several price points across the region, which is a breath of fresh air for buyers.

A year ago the 30 year FRM averaged 3.85%. It’s good to review how much of a home you could afford if you are thinking of making a home purchase, especially as rates decline. This handy chart above demonstrates how different 30 year FRM interest rates can impact the loan amount you may qualify for. Lower interest rates increase your buying power.

If you are considering a home purchase, speaking with a real estate broker about the process, and the questions you have, is a terrific first step. The brokers at Windermere Mercer Island would love to meet with you, and discuss your goal of owning a home.

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