What Do Rising Interest Rates Mean for Your Monthly Payments?

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Today, Albert Gonzales joins us to discuss the mortgage industry and where interest rates are heading.

When the Feds announced a rate increase in mid-December of 2015, they weren't joking around. Currently, 30-year fixed-rate mortgages are around 4%; we expect that to increase to about 4.5% throughout the course of the year. How might this affect you?

If you get a loan amount of $200,000, a .5% increase in interest rates will cost you $60 more a month in payments. This is an overall increased expense in interest to the tune of about $20,000 over the life of the loan. So, as you can see, even a normal jump in rates greatly affects your ability to afford a home.

If you're looking to refinance, there are a few ways to remove your private mortgage insurance. Given the equity you have in the home, you can have an appraisal done or, if you have had first lien and a second lien, you can roll both into one refinance to have only one monthly payment. Another thing to consider is reducing your term from a 30-year mortgage to a 15-year mortgage.

If you have any mortgage questions, don't hesitate to reach out to Albert at (317) 605-3383 or Albert.Gonzalez@Ruoff.com. Of course, if you want to see how much equity you have in your home so you can refinance and lower your monthly payment, give us a call or shoot us an email at any time. We would love to hear from you!