Are you getting ready to purchase a home soon and considering mortgage options? Are you a current homeowner who just noticed that your mortgage payment went up, close to $50 or more per month?
Usually, a homeowner assumes that a fixed-rate mortgage means that the interest rate on your loan will never decline or rise. You can pay your loan off early or make regular monthly payments for the duration of the mortgage agreement, but your payments will always remain the same until the note is paid off.
Fixed-Rate Mortgage Increases | Real Estate Agent in Raleigh NC
Unfortunately, fixed-rate mortgages aren’t quite so fixed. How is this possible? First off, it’s likely your property taxes and homeowner’s insurance are attached to the loan. With that being the case, anytime those costs rise, your mortgage payment will too.
Many first time home buyers do not realize this. In addition, there are many knowledgeable homeowners that don’t expect this, either.
According to Kyle Winkfield, president and chief executive officer of the Winkfield Financial Planning Group,"So many people make financial decisions without fully understanding all the moving parts," Winkfield said. "Sometimes people make their mortgage decisions in a vacuum. When they think about a mortgage they think about the interest rate. They never think about all those other moving parts."
Mortgage rates can be unpredictable, no matter which type you get. That’s why it’s important to make a budget before buying a home and stick to it during the buying process. Refrain from buying a house that’s at the top of your budget range, as you must consider this increase in payment at some point.
Leave yourself some breathing room so that when this rainy day comes, you’ll be prepared for it. If you’re already at the top of your budget for a monthly payment and are facing an increase, consider reducing your budget for other things like eating out and spending less on clothing or shoes.
In our next blog post, our real estate agent in Raleigh NC will talk more about how your fixed-rate mortgage can increase through property taxes and homeowners insurance. Be sure to visit back with us, soon!
Roark Premier Team | Real Estate Agent in Raleigh NC
With the lower interest rates and increased sales, it's a great time for buyers to really consider purchasing a home before the end of this year. With time left to search, as well as sell current homes, now's a great time to contact our North Hills Raleigh real estate agent!
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