How to Secure Today’s Low Interest Rate Before the Next Increase

By Kat Oak, Contributor January 18, 2017

Did you know that, in the fall of 1981, the national average for a 30-year, fixed-rate mortgage was 18.63%? In an effort to battle rampant inflation, the Federal Reserve raised interest rates, which caused mortgage interest rates to go up, and the housing market suffered intensely. In fact, homebuyers at that time ended up paying a whopping 82% toward interest over the life of their mortgage!

Since then, the Federal Reserve has gone to great lengths to manage inflation and interest rates, and we’ve seen mortgage rates generally under 6% for quite a while. At the end of 2016, the Fed increased its benchmark interest rate for the first time in a year, also noting that it had plans to implement three additional increases throughout 2017.

In September of 2016, we saw interest rates as low as 3.3%, and these have been slowly and steadily climbing ever since. We’re now above 4% and the Fed increases planned for this year will result in rising mortgage interest rates.

How will an increase impact you?

Let’s look at the difference in buying a home in September of 2016, with a 3.32% interest rate, versus buying it in mid-December of 2016, when rates for a 30-year fixed mortgage were at 4.17%. With a median home price of $304,500 and 20% down, you would be paying $1,187 per month for the house purchased in December, versus $1,070 per month for the house purchased in September. That’s a difference of $117 per month, $1,404 per year, or $42,120 over the term of the 30-year mortgage!

Ultimately, your mortgage interest rate impacts how much home you can afford since it directly affects your monthly payment.

How Trio can help

When you work with Trio, you’ll be locking in your mortgage interest rate at today’s rate, so when you’re ready to buy in a few years, you’ll be working with a better rate than you’d be able to find in the general market.

Sound too good to be true? It’s not! Here’s how it works:

  • You work with your agent to find the home you’d like to buy
  • You, the homebuyer, work with Trio to purchase the home
  • You enter into a lease-to-own agreement with Trio, with part of your monthly payment going toward a future down payment
  • When you’re ready (during the lease or at the end), you’ll have the option to purchase your existing home using your down payment at today’s interest rates.

Even though interest rates are slowly increasing, it’s still a great time to buy a home. If you’re interested in buying but aren’t sure if you’re financially ready to do so, Trio is here for you.

4 thoughts on “How to Secure Today’s Low Interest Rate Before the Next Increase”

  1. You mentioned part of the monthly lease will be used for the down payment?..is that lease money the only money that expected for a deposit or do they have to have the normal 3.5 or more when it

    1. Great question! As for the down payment that depends on if you are inquiring about the lease program deposit or the home purchase sale after the lease program. For further information, check out these two links from our website that explains the program a little more thoroughly. https://www.thinktrio.com/ownoption.php and https://www.thinktrio.com/facts.php. We hope this helps. If not, feel free to email us at info@thinktrio.com and we’ll be happy to have someone share all the details of the program with you. Or, give us a call at (855) 873-8746.

  2. I’m interested in this program. Will someone please contact me by email?

    Thanks you,

    T and D Munich and family

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