Mortgage Rates Creeping Up

Well -they’ve been going down and down and down – and while no one can predict for sure what is coming tomorrow – Mortgage Interest Rates have been slowly and steadily climbing for the last couple of weeks.

If you are one the “double jugglers” the time to move may be right now.  A double juggler is someone who is waiting for housing prices and mortgage rates to simultaneously be at the lowest possible combination.

Sometimes jugglers can juggle themselves right past the optimum point.   If, for example, you had bought a home 4 or 5 weeks ago ago for 300K, and got a mortgage of $250K at 4.5% for 30 years, your principal and interest payment would be roughly $1266 per month.

Assuming you wait for another 90 days and hope that the price of the house drops to $285K (which it may or may not) and you are able to purchase it and get a mortgage for $235K at 6% for 30 years, your prinicpal and interest payment would be roughly $1408 per month.

If you add up the increased monthly payments over the life of the loan, you will end up paying about $50K more for the house which, obviously more than wipes out the $15K you saved by waiting out the price.

Also keep in mind, that there are some  indications that housing prices have hit bottom or will very soon.  So, you could, not only pay more on the mortgage, there is no telling what the price of the house is going to be in 90 days.

Again – I can’t predict what is going to happen.  If I could, I’d probably would have competed with Penske for the purchase of Saturn from General Motors

Everyone has to make their move when they feel it’s right to do so.  Just make sure you don’t wait right past the bottom.  It could cost you.