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Mortgage Experts Say in Real Estate, Time is of the Essence

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When it comes to buying a home, two experts say there's no time like the present. NY1's Tara Lynn Wagner filed the following report.

Looking to buy a home? Now's the time to get off the fence.

"It's really important to purchase a house in the next five months because we're only going to see prices skyrocket as interest rates rise and demand follows suit," says Ross Kenneth Urken, Personal Finance Editor at "TheStreet."

Let's start with interest rates which Ace Watanasuparp of DE Capital says are slowly rising.

"Right around 4.25% in rates as of today. Last year, we were right around 3.5% so you do see that moderate increase in rates." says DE Capital President Ace Watanasuparp.

He doesn't expect a major jump this year, but says we could see rates of 5% in the next twelve months.

"Right now is the best time. I mean, if you look at rates in 1984, rates were at 12, 13%," Watanasuparp says.

That's not to belittle the impact even a fraction of a percentage point can make over the life of a 30 year mortgage. I had Watanasuparp run some numbers for me. Let's say you take out a $400,000 loan at 4.4 percent. Your payment will be around $2,000 a month with $321,000 in interest tacked on over 30 years.

"Now let's say you receive a rate of 4.9 percent. Just a half a point difference in rate. Your monthly payment jumps up to $2,122. That's a $119 difference," Watanasuparp says.

Or an extra $1,400 bucks a year. Here's the real issue, though: total interest jumps to $364,000, meaning over the life of the loan that half a percentage point cost you an extra $43,000 dollars.

That difference may be key to motivating buyers and that's where price comes in.

"I really think it's chicken and egg. People are seeing interest rates rise so they are more compelled to get into the market and demand is thus raised," Urken says.

He says home prices are at about 2004 levels. That's better than the rock bottom of 2008 but still 20% off their 2006 high.

If you are looking to buy a home, your biggest priority right now should be getting your financial house in order.

"Credit score is really your golden ticket to getting a great rate from lenders and thus a more affordable mortgage," Urken says.

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