How rates can impact your offer

MarioBilotas.com

Week and a half into September and the market is still showing signs of positive buyer traffic. With properly priced properties receiving multiple offers, it may be the shortage of inventory, or just the final push to buy a home before New Years Eve arrives. For many, however, it is the fear that the increasing interest rates will increase, and possibly even jeopardize the new purchase.

Earlier this week rates fluctuated about an 1/8 -1/4 of a point. Although on mortgages between $200k – $300k this only signifies an approximate $30/month increase, however people at the peak of their pre-approved amount or buyers in a multiple bid situation wanting to be aggressive, this $30/month may mean a $6000 purchase price reduction on the offer.

In the example below the buyer based on their PITI only qualifies for a mortgage payment of $1778/month. (PITI = Principal + Interest + Taxes +…

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