Higher Interest Rates.
Interest rates have been going up since September 2017 and this has been affecting how much buyers will qualify based on their income and credit.
The news causes some worry, however the effect on the payment is not that high. For an example of the effect on the mortgage payment, let’s assume a 95% LTV of a $500,000 house and the interest rates on a 30 years fixed loan at its lowest point in September 5th 2017 of 4%. The principal and interest would be $2,268.
With current rates at around 4.75% the new payment is $210 higher at $2,478.
The Benefit of the Mortgage Credit Certificate.
The Mortgage Credit Certificate is a tax credit of 20% of the interest rate on a mortgage loan that can be applied to the federal tax return of first time home buyers.
Below, the benefit of the MCC. The house price limits in Los Angeles County in a targeted area is $715,872 and on a non-targeted areas $585,713.
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