Most notably, mortgage interest rates are rising. As of September 27, the average interest rate on a new, 30-year fixed-rate mortgage was 4.72%. About a year ago, the average rate on this mortgage was 3.83%. While the difference is slightly less than 1%, it has an impact.

For example, a $300,000 mortgage at 3.83% would give you a principal and interest payment of $1,403 a month. If you made this monthly payment each year for the full 30-year loan term, you’d repay a total of $505,080. ($300,000 to principal, with total interest paid of $205,080.)

Borrowing $300,000 with a rate of 4.72% gives you a principal and interest payment of $1,560 a month. The higher interest rate costs you $157 more per month! Over the life of the mortgage, your total repayment would be $561,428, meaning you’d pay $56,348 more in interest.

On another front, higher mortgage rates mean that debt-to-income ratios can be harder to meet. During the mortgage underwriting process, your gross monthly income is compared to all of your monthly debt payments – student loans, credit cards, car payments, ect. This is known as “front-end” DTI. Next, the lender adds your projected mortgage payment into the mix, for the “back-end” DTI.

In the most generous underwriting criteria, your back-end DTI cannot exceed 50% of your gross monthly income. Naturally, the higher the mortgage interest rate, the higher your DTI will be.

But when interest rates are rising, a variety of consumer debts also see higher rates and higher monthly payments. If you are carrying any credit card balances, student loan debts or other loans with variable-rate interest, you’re likely to be paying more for them. When these monthly payments rise, it affects your DTI – not to mention your wallet!

If you’re unsure of the rate and terms on your current debts, now is the time to examine them and create strategies for paying them down. Reducing your variable-rate consumer debt will save you money, and put you in better shape for mortgage approval!

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA-M, CNE, CSP, PSA, e-PRO, CREM, ABRM, AHWD
Buyer’s Resource Realty Services, www.buyershome.com
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

The post Columbus Home Buyers Should Prepare for Higher Interest Rates appeared first on Columbus Ohio Real Estate | Buyer's Resource Realty Services.

According to a recent consumer survey by TD Bank, home buyers remain stressed about the mortgage process, even though the lending environment has improved. Overall, buyers want better information about the mortgage process up front, in order to understand their options and prepare for the costs.

The survey, which largely targeted Millennial home buyers, revealed that 62% of respondents spent $2,000 more on financing costs than expected. Nearly 50% of respondents said the financing costs were up to $5,000 more than expected.

Other trends revealed by the home buyer survey include:

• 14% of home buyers researched their lenders through social media.
• About 50% of home buyers put less than 20% down on their first home.
• 56% of Millennials obtained financing through an affordability program.
• About 42% of Millennial buyers have a co-mortgagor other than a spouse.

Mortgages have gradually become more accessible in recent years, with down payments as low as 3%, and a slight easing of underwriting criteria. Despite this, home buyers are not finding transparency nor simplicity in the mortgage process – especially when it comes to online information.

Surveyed buyers also expressed a desire for home financing seminars, home buying workshops, and for better customer service when dealing with lending institutions.

Fortunately, there is a solution for Metro Columbus home buyers! Buyer-Clients of Buyer’s Resource Realty Services are given a 140-page “Educated Buyer Notebook” upon signing on to find their home! The Notebook has an extensive financial section which helps demystify the lending options available, and explains the process involved. It includes checklists, a glossary, and questions for you to ask lenders, to make sure you receive the best loan, interest rate and closing costs. Further, we can offer you an upfront analysis of what a lender might pre-qualify you for, so you are better prepared.

Home buyers who become Buyer-Clients of Buyer’s Resource Realty Services have the advantage of true fiduciary representation. This means we can help you examine your lending options, explain your choices, and provide you with objective guidance.

We also have a network of local, reputable mortgage lenders who will take the time to discuss your needs, and find the best loan programs for your situation. Whether you already have a lender in mind, or you’re starting from scratch and want to explore options, we can help!

As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

The post Home Buyer Survey Shows Need for Better Mortgage Information appeared first on Columbus Ohio Real Estate | Buyer's Resource Realty Services.