As I reported recently, Fannie Mae is now requiring only a 3% down payment on all loans processed through its Desktop Underwriter® program. This is great news for buyers who can take advantage of this program.
If you are in the market for a conventional mortgage, however, the news may not be so promising. As this article from the Real Estate Journal explains, mortgage interest rates are climbing again at an alarming rate, and it is in Bradley Beach NJ real estate buyers’ best interests to lock in a low rate now. Due to fears of inflation, the average interest rate on a typical 30-year fixed loan has spiked to 6.02% from 5.82% in just a week.
To see how this spike would increase your mortgage payments, consider this: as a rule of thumb, for each $100,000 you borrow, an additional tenth of a percentage point on your mortgage rate will add about $2,300 to the total amount of interest you will pay over the life of the loan. For example, on a $300,000 mortgage, the current increase will add $38 to your monthly payments. It will cost an extra $4,000 in interest over the total life of the loan.
To learn more about Bradley Beach NJ real estate, or for a referral to a reputable lender who can explain your options when it comes to interest rates, please call me at 732-775-2774 or visit PatrickParkerHomes.com.