First, what are some of the things a buyer can not really control? Although not all inclusive remember these could include
- Association Dues. They may be set at the time of purchase but they can change.
- Homeowner Insurance. Storms, wild fires, sink holes or whatever. When insurance companies payout, consumers end up paying in!
- Flood Insurance, if required. If you buy in a flood zone you may have no choice. Currently there is quite a bit of discussion ongoing about future increases in this insurance rate in Florida and across the entire country.
- Taxes. No explanation required here!
- Special Assessments (governmental, association). They happen. It could be for the new roadway or drainage control. Or it could by the association for pool repair, roof replacement or whatever.
- When. Buyers decide when they are ready and able to buy a home. No one will compel one to buy although the current tax policy favors a buyer's mortgage interest deduction.
- How much. Buyers can control how much they pay for a property. The control may be in the way of a mortgage approval limit or just a personal comfort level. Related to how much a buyer pays is also another factor - location.
Where are interest rates going? Who knows for sure? I asked a mortgage officer earlier this week for his opinion. His response was pretty much what I hear everywhere else - up.
How does an increase in interest rates affect a buyer? The monthly payment changes as well as possibly a reduction in mortgage approval amount.
For example on a $150,000 30 year mortgage. The difference in payment from 4.5% to 5.5% is $122 per month ($760 to $852). It is not Want to check how the rate changes affect a payment.... Just go here to a mortgage calculator from Bankrate.com.