| oakcreekneighborhood.com | |
|
If you are buying property now it would be wise to think ahead and be prepared for higher costs in the future. House prices have started to rise with a shortage of properties on the market in many places rsspect.org Nationwide have reported that house prices increased in value by 0.5% in November taking the annual rise to 2.7% ambafrance-kwt.org Buyers are keen to snap up property before they rise any more and more mortgages are becoming available. House prices could carry on increasing gradually, though generally when there is a general election looming people tend to stay put rather than up sticks and with less activity in the market the housing market is dampened oldtownfoothillsnews.com Unemployment has been lower than expected and the rate of unemployment in the new year will be a crucial factor in how house prices fare next year oxbowresources.com House prices have already been supported partly by some companies opting to reduce work hours and pay rather than making mass redundancies. However, interest rates are at an all time low pvcsleeve.com They will rise, and this will effect mortgage repayments which could in turn dampen the housing market reneenortonobx.com As soon as the economy is believed to be stable the Bank Of England are expected to raise interest rates renovatingnj.com Prior to the recession, interest rates at around 5% were still considered to be relatively low. They will return to this figure and more likely will go higher than this figure. Using a basic online mortgage calculator, here are the differences in the monthly payment for a mortgage of £100,000 spread over 25 years: At an interest rate of 3% the monthly repayment will be £474.21 At an interest rate of 5% the monthly repayment will be £584.59 At an interest rate of 7.5% the monthly repayment will be £738.99 At an interest rate of 10% the monthly repayment will be £1,187.02 When you buy your property now you'll be able to get a good deal on your mortgage rate. You'll also need to factor in what will be happening in the time that you expect to live in your property. If you opt to be on a tracker or fixed rate mortgage which then ties you into the variable rate you will need to be able to afford a higher rate than you are likely to be on now. No one can ever know what the future holds and the best you can do is predict. If your future is uncertain and you may want to be moving house in a couple of years then choose a mortgage that is either on the variable rate with no tie in or on a short term, say 1 or 2 years, fixed term with no tie in. Beware of redemption penalties and if you pay off your mortgage before your fixed rate or tie in has ended you could end up paying back more than you borrowed. In addition to mortgage payment rises, household bills from petrol, gas and electricity bills are expected to rise. When you are working out what you can afford when you are buying a house factor in enough of a margin to cover higher living costs. The only way is up for interest rates. House prices are more uncertain. They are rising now, they could continue to stay at a stable rate next year, but they may fall again if unemployment rises sharply and if there are more shocks in the global stock markets. During these times, think ahead, do not overstretch and overburden yourself and factor in higher costs to protect yourself in the future.
| |