Monday, October 12, 2015

Interest Rates: How They Impact Your Purchase

If you're new to the real estate market, you have a lot to learn before your buy your first house at the Lake of the Ozarks. With so many different aspects and all of their accompanying details, it can be a lot to take in all at once. At The Property Shop at the Lake, we make it a point to help our clients get all of the information they need to make educated decisions. This week, we're here to help you to learn more about interest rates and how they impact your home purchase.

Why Interest?

When you purchase real estate at the Lake of the Ozarks, you are not the only one who is making an investment - your mortgage lender is making an investment, too. When you buy a house, your lender is the one who pays the seller outright (by loaning you the money). Your mortgage payments over the next fifteen, twenty, or thirty years go towards paying back that loan.

This process allows you to reap several rewards, such as having a place to live and accumulating the "forced savings" that come from building equity in your home. By charging interest, your lender gets a reward, too - they make money off of their investment. It's a symbiotic relationship; by working together, both parties benefit.

What Are Interest Rates?

Interest is the money the bank makes off your mortgage loan, and interest rates are the factors that dictate how much money that is. Interest rates are a percentage of the total purchase. Currently, rates range anywhere from approximately 2.98% to around 4.16%. The exact rate you can get will depend upon several different factors, such as the type of loan you get, the duration of the loan, your credit history, and more.

How Much Will Interest Rates Really Affect My Purchase?

Your interest rate will have likely have a huge impact on the affordability of your home, as it will impact how high your monthly payment is and the total dollar amount you will end up spending on the home. Consider this graph:

NOW Is A Great Time To Buy!

As you can see from the graph, interest rates are currently at an all-time low, which means it's easier to afford more expensive houses. While it is impossible to predict whether the rates will lower or raise in the future, our Lake of the Ozarks real estate agents believe that it is always better to be safe than sorry! If you are thinking about purchasing one of the homes for sale at the Lake of the Ozarks, let us help you get the process started. You don't want to risk the interest rates rising before you get the chance to buy!

The Property Shop at the Lake
2086 Horseshoe Bend Parkway
Lake Ozark, MO 65049
(573) 693-1100
(573) 480-7760

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