Zancope Notary is a full-service firm specializing in the handling and administration of real estate transactions for clients. As such, we keep our finger on the pulse of home buying and selling. Recently, interest rates have started to rise. So, what does that mean for home buyers? In today’s blog we are going to explore the effects of rising interest rates on home buyers.
When interest rates rise, for the borrower, that means that it costs more money to borrow money. In simple terms, it means that mortgage payments will be higher to borrow some amount of money than it would have been when mortgage payments were lower.
You and your lenders calculate how much they think you can afford to pay for a mortgage on a monthly and yearly basis. When interest rates rise, that means that you will be able to afford to borrow less because the interest rates are higher and that makes the payments higher for borrowing a certain amount of money.
For home buyers, that means you may need to look at lower priced real estate as interest rates rise. Another solution is to wait and have a larger down payment so you don’t have to borrow as much.
Regarding the home market, when interest rates rise, this tends to have a cooling effect on the market. There will likely be fewer bidding wars because not as many people can afford sky-high prices.
The good news is that higher interest rates also tend to push down the prices of homes because if buyers cannot afford as much, then sellers need to lower prices to meet the threshold where buyers can afford to buy the property.
Keep in mind that interest rates tend to move in a cyclical fashion. If you look at interest rates over 50 or 100 years, you will see that they go up and down.
Whenever you decide to buy or sell your house, think of Zancope Notary in Langley. We can help to make your real estate transaction a painless and worry-free experience. We have years of experience and will ensure all documents are handled effectively and efficiently.
At Zancope Notary Public, our specialties are Wills and Estate Planning documents (Representation Agreement and Power of Attorney) and real estate. We are a full-service firm with two notaries full time at the office. We also offer real estate services for clients in Langley and throughout Greater Vancouver and the Fraser Valley. We can help you with buying, selling, and refinancing real estate, and provide family property transfers and independent legal advice.
If you have any questions about this article or estate planning, in general, or if you want to make an appointment with Zancope Notary Public, please contact us at (604) 260-6783.
- Understanding the Home Buying Market With Rising Interest Rates - June 28, 2022