I met with our financial guy last night. Rates were at 4.5. Today, they jumped to 4.75! It looks as if the bottom of the market is now behind us and things are going to continue to rise. Am I correct with my math...the difference for $100,000.00 between the two rates (4.5 and 4.75) is around $50,000.00 for a 30 year?!? If that is the case, our house is on the market with little or no interest, should I slash the price 10K - 20K just to lock in a decent rate before things get way out of hand??? What am I missing??

What am I missing? Rates here didn't jump up overnight. And how can a seller lock in a rate? From a buyer's perspective, the difference between 4.5 and 4.75 is about $15/mo. I don't think that will cause the sky to fall.

To answer your question, if you have not had any interest in your house, you need to lower the price.

[quote=BK Estates]What am I missing? Rates here didn't jump up overnight. And how can a seller lock in a rate? From a buyer's perspective, the difference between 4.5 and 4.75 is about $15/mo. I don't think that will cause the sky to fall.

To answer your question, if you have not had any interest in your house, you need to lower the price. [/quote]

If I sell my house soon before rates go up, I can lock in a rate on the new house. A difference of .25% means about $125,000.00 over a 30 year loan. So the quicker I sell my house, the better off I'll be. The question is SHOULD I cut my price way down and take a loss on this end, and make it up on the new house by locking a rate before they go up.

.25% will not make much of a difference at all (nowhere close to $125,000). Try using a mortgage calculator with an amortization chart to show how much total interest is paid and then do it again with an interest rate .25% higher.

Example (I believe I am doing in correct for an American mortgage):

$100,000 mortgage at 5% over 30 years
Monthly payment= $536.82
Total interest paid $93,255.79

$100,000 mortgage at 5.25% over 30 years
Monthly payment = $552.20
Total interest = $98,793.33

I believe that a change in rates of 2.5% would result in your $50,000 difference, not .25%

Yes, AllenB, we're not sure if we are understanding you correctly, but MHT did the math correctly, and it's about a $5,000 difference over 30 years. No need to panic...

No one can forecast what the rate will be, but don't get too anxious about the daily fluctuations. We're all afraid that the peak/bottom has passed and we've missed it, but we can't react to every movement. Just do what you have to do and if you don't get the lowest interest rate, oh well...

I had a buyer that lost their rate lock because the appraisal came in lower than the purchase price.Rate went from 4.67 to 4.79 percent.

Buyer was overjoyed as the bank agreed to reduce the purchase price 15,000 to the new appraised price on the foreclosure.

So losing your rate lock is NOT always a bad thing!

On the rate lock their time ran out because we had to wait for the bank to agree to reduce the purchase price based on the lenders appraisal.