In mid-March, the Federal Reserve decided to leave interests rates alone, keeping them in place for now. Federal Reserve Chairwoman Janet Yellen expressed the need for caution particularly since foreign markets have slowed and the U.S. economy strives to gain steady footing.
The Fed plans on only 2 rate hikes instead of the projected 4 previously outlined sometime this year. Although June had been the projected month when a rate hike was expected to hit, economic watchers now aren’t so sure June will bring about any change in interest rates. Officials said hikes all depend on how the economic conditions play out.
Along with this, any hikes are expected to be slight. The Fed now sees just a 0.9 percent funds rate in 2016 and a 1.9 percent level by the end of 2017. These reflect cuts of half a percentage point than previously anticipated. Expectations are for 3 percent in 2018.
The low-interest rate levels have invited home buyers into the real estate market, and the next few months will prove telling for economic progress in the U.S. as well as for the housing industry across the country, including Fort Lauderdale luxury homes.
Importance of Interest Rates to Home Buyers Including Fort Lauderdale Luxury Homes
Interest rates are expressed as a percentage. It is reflective of the cost you will pay each year to borrow the money for a home. The interest rate alone does not reflect charges or any other fees you may have to pay for the loan, but it definitely impacts the bottom line when it comes to your mortgage.
Interest rates, however, are not the only factors that should determine when you purchase a home, like Fort Lauderdale luxury homes.
Factors That Are Important for Buyers of Fort Lauderdale Luxury Homes
Financial Readiness
What you will need to move forward on a home, especially one such as Fort Lauderdale luxury homes, is good credit, a steady income, and money over and above what you will need to have available for a down payment.
Down Payment
When it comes to a down payment, the amount required depends on the loan type. For a conventional loan, like a 30-year fixed mortgage, most home buyers will need to place somewhere between 5 to 20 percent of the sale price down in cash in order to qualify for it. For many real estate markets, including Fort Lauderdale luxury homes, if you put down less than 20 percent, you will most likely have to pay mortgage insurance.
Remember, the higher your down payment, the lower your monthly mortgage payment will be.
How Long Will You Stay?
This is hard to predict, but if you have a job that frequently makes you relocate, then investing in real estate property may not be your best bet. Typically, it takes four to seven years to break even on a home. This amount of time allows you to earn enough appreciation where it can pay you back for the cost of the transaction and cost of ownership.
This can vary depending on your particular real estate market. But, on the whole, it is unlikely that you will save money buying a home and selling it in two years than renting.
