The first question before you consider house hunting is how much house can you afford? With the recent drop in mortgage rates, many Americans are buying a new home or buying a home for the first time.
Fannie Mae’s monthly survey shows that positive sentiment about home buying in March jumped to the highest level since last June.
The massive rate drop means an average 30-year home loan rate is now 4.07%. According to a CNBC interview with mortgage lender, Matt Weaver:
“We did not think that we would see interest rates come back to these numbers. We were pretty certain the train had left the station and wasn’t coming back.”
You Need a Plan
If you really want to know how much house you can afford, you need to make a plan. We recommend getting pre-approved for your mortgage before you start your house hunt. Here’s what you’ll need to consider:
Down payments are normally 10%-20% of the home’s price but there are mortgages that allow for a 3%-5% down payment. If the money you put down is less than 20% that means you’ll need private mortgage insurance, which is typically 1% of the outstanding loan.
Go to our loan calculator to figure out how much house you can afford.
Make sure when figuring out your monthly payment, you include everything— the loan principal interest, property taxes and homeowners insurance.
We’re Here to Help
It can be overwhelming to consider the biggest purchase of your life! We do this everyday with clients all over Kansas City. Brinton Realty owner Reed Brinton is a third-generation real estate agent and broker. Reed and our team are experts in the KC real estate market and we’d love to help you figure out how to figure out what’s best for you.
Contact us to find out more about the change in rates, to see if it will work for your situation: Call or text Reed at 913-686-8868 or email firstname.lastname@example.org.