With Elysia Stobbe, Author – How to Get Approved for the Best Mortgage without Sticking a Fork in Your Eye: A Comprehensive Guide for First Time Home Buyers and Home Buyers Getting a Mortgage since the Mortgage Crisis of 2008
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Interest rates are all over the map nowadays. Because of the Federal Reserve, short term rates have risen and long term rates have dropped. As a mortgage industry expert, Elysia Stobbe sees interest rates trending downward and believes it is still a great time to lock in a 30-year mortgage at very favorable rates. But if the Federal Reserve goes through with its planned increases (four 0.25% quarterly increases for a total increase of 1% in 2016), monthly mortgage payments could rise considerably. However, Elysia cautions buyers against overly finessing mortgage interest rates, because a small fractional rise won’t amount to a significant increase in your monthly mortgage payment.
She also believes people should make a home purchase only if they can comfortably afford a mortgage. To her, the safest loan-to-income ratio should be one-to-four, where your monthly mortgage is no greater than 25% of your monthly income. Because she tends to be overly conservative, she tells us not to take that 25% recommendation as set-in-stone (especially now when mortgage rates are at all-time lows) and to be open to increasing your mortgage outlay to perhaps a third of your monthly income, but only if it wouldn’t put a strain on your lifestyle.
