For example, this is the second rate hike by the Fed in three months, and more increases are expected later this year. Here’s how it could affect you.

Consumers with variable-rate debt, such as credit cards, home equity lines of credit and adjustable-rate mortgages, could see an increase in their minimum required payments in as little as 60 days, depending on the type of debt and its terms.

Mortgage rates have already been trending higher during recent weeks. As of March 16, Freddie Mac’s weekly mortgage survey shows 30-year fixed-rate mortgages averaging 4.30%. This is the highest rate average so far in 2017. A year ago, this same mortgage had a rate of 3.68%.

Here’s another wrinkle to higher rates: they will affect the debt-to-income calculations (DTI) used by mortgage lenders to determine home affordability. If you are carrying variable-rate debts, like credit cards, increases in those rates could impact your monthly debt payments, and affect your front-end DTI.

Front-end DTI refers to the percentage of your monthly income that is taken up by existing debt payments. Back-end DTI considers your new, proposed mortgage payment on top of your existing debt payments. Bottom line: when interest rates move higher across the board, it means you qualify for less house.

When rates move up, and home prices are increasing, the home buying dollar doesn’t stretch as far. This is why progressive increases to interest rates could eventually push some first-time buyers, and others who are on the margins of mortgage qualification, out of the housing market.

As a future home buyer, one of your best defenses against a rising rate environment is to pay down and pay off your consumer debts! We’ll share some debt reduction strategies in a future blog post! And when you’re ready to obtain your mortgage pre-approval, we’ll refer you to trustworthy, local lenders.

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 What Rising Interest Rates Mean for Columbus Home Buyers appeared first on Columbus Ohio Real Estate | Buyer's Resource Realty Services.

• 65% of respondents believe that homeownership is a proud accomplishment.
• 72% think that now is a good time to buy a home.
• 9 out of respondents10 prefer home ownership to renting.

Here’s where the misconceptions come in:

About 67% of potential buyers believe they needed a “very good” credit score to buy a home. They defined this as a score of 780 or better, which is much higher than necessary. For example, FHA mortgages allow credit scores in the mid-to-low 600’s.

36% of respondents assumed that a 20% down payment is always required. Again, this is higher than what is actually needed as a minimum. FHA loans allow down payments as low as 3.5%. Conventional loans now have down payment thresholds as low as 3%.

The 20% down payment comes into play when you wish to avoid mortgage insurance. See our blog post on the topic of Private Mortgage Insurance and Mortgage Insurance Premiums.

These responses echo the buyer confusion revealed by prior surveys. In a recent Housing Wire report, 42% of prospective home buyers said they knew very little about financing a home. We highlighted some of these earlier surveys in our April 30 blog, “Ignorance Isn’t Bliss When Buying a Home!”

Why do misunderstandings about the home buying process and mortgage financing persist? Likely because most real estate agents represent home sellers, and do little, if anything, to offer quality information to home buyers. Especially to first-time home buyers, who may be deemed as “unprofitable” clients. Even in cases of so-called buyer agency, few agents provide any type of financial guidance.

Fortunately, we’re here to clear up the confusion! We offer a free, no-obligation Buyer Conference that looks at your financing options. We explain the pros and cons of each mortgage program, and how each program affects your mortgage payment and closing costs.

We also help our Buyer-Clients evaluate financing offers, and identify the best lender and program for your individual needs. While most agents simply refer buyers to a lender, our fiduciary duty to you goes much farther!

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 Buying Survey Reveals Common Misconceptions appeared first on Columbus Ohio Real Estate | Buyer's Resource Realty Services.