When buying a home in Tulsa, it is important to understand how your future home purchase will be affected by interest rates. Ultimately, increased interest rates can make the purchase of a home for sale in Tulsa more expensive. Even half a point increase in interest rates can significantly impact the cost of home ownership.
Let’s take a look at an example. Suppose you are considering the purchase of a home in Tulsa with a list price of $100,000. With an increased interest rate of half a point, your home mortgage would increase by about $42.00 monthly. By comparison, if you are considering the purchase of a home that costs $300,000, then you would be looking at an additional $125 per month in mortgage costs.
An increase in interest rates not only affects the cost of your mortgage but also the ability to qualify for a home loan. Lenders typically base qualification on the amount of an applicant’s income. Loan ratios are usually based on the type of the loan as well as various details of the loan, including the amount of the down payment and the applicant’s credit score. If you are already pushing the limits of the lender’s qualification standards, that additional amount on your mortgage could make the difference between being able to qualify for a home mortgage and being denied for a loan.
While even half a point increase in interest rates might not sound like much, it can make a significant difference when you are buying a home in Tulsa by determining how much home you can afford to buy as well as whether you can actually qualify for a loan.