What a difference two months (and 1.11%) makes: Higher rates mean this Brisbane condo would now pencil out to $254 more a month (Kiesha Stephens/Redfin)

Mortgage interest rates are on a tear. Last week they registered their sharpest one-week spike in years, hitting 4.46% for a fixed-rate 30-year home loan, according to Freddie Mac. Less than two months earlier, the rate was 3.35%.

Today’s Chronicle looks at the impact on the housing market; click here for the story.

Is a percentage more really that big a deal? Well, just ask all the folks who refinanced to carve that 1% off their mortgage rate.

Those who have not yet refinanced, perhaps because they were either underwater or close to it (lacking that magic 20% equity) are getting worried they may be out of luck. It’s a balancing act to see what will happen faster: Higher home values to increase their equity or higher mortgage rates that will make a refi less attractive.

Some home buyers, as well as those refinancing, may see the rising rates as motivation to get in the game.

“The rate increase spurred a lot of people to pull the trigger,” said Jay Voorhees, owner/broker of JVM Lending in Walnut Creek. “We’ve had an uptick in volume recently with both purchases and refinances.”

In his blog, mortgage broker Julian Hebron of RPM Mortgage in San Francisco discusses the possibility that rates could hit 5% in the near future.

While many experts say the housing market as a whole is likely to shrug off the higher rates, for some individual buyers, especially those on a shoestring budget, the impact will be stronger.

Consider these two homes now on the market, a condo very close to the Bay Area median, and a more high end home. Assuming a standard 20% down payment, look at what the monthly mortgage payments would be under today’s rate, and what it would have been in early May with the 3.35% rate.

This Brisbane two-bedroom condo “steps from the great outdoors,” (at top) is listed at $499,000. At today’s rate of 4.6%, monthly mortgage payments would be $2,017.  Monthly payments at 3.35% would be $1,763, or $254 less.

This San Jose 5-bedroom with an “inviting floor plan” and “lush backyard” in the Cambrian neighborhood (below)  lists at $889,000. The monthly cost at 4.6%: $3,587.  At 3.35%: 3,135. The difference: $452 a month. (Caveat: In reality this jumbo mortgage might mean a higher rate, but the spread between two months ago and now would be consistent.)

Carolyn Said is a San Francisco Chronicle staff writer. For Bay Area real estate news and insights, follow  her on Twitter: @csaid

This 5-bedroom in San Jose’s Cambrian neighborhood lists for $889,000. (Ashley Rabello/Redfin)

Article source: http://blog.sfgate.com/ontheblock/2013/06/30/mortgage-interest-rates-on-upswing-heres-the-pocketbook-impact/

Time to get a vacation house?

With the high temps and clear skies seen over most of the Bay Area the last several days, everyone is seen out and about enjoying the abundant sunshine and the great outdoors. It’s weather like this that make many people contemplate the idea of getting a second home, something that allows them to get away from the day to day of the Bay Area and get some fresher air high up in the mountains, down in the valleys of the wine country or along the coast and near a beach.

http://myislandbungalow.com/house.html

Looking for a beach house?

If you’ve been finding yourself heading out of town to the same place every weekend, whether it’s Tahoe, Sonoma or Santa Cruz, it may be a good time to consider making that leap into an investment in a vacation home. Like the primary residential real estate market, CNNMoney reported that the median price of vacation homes has been falling, based on a news release by the National Association of Realtors last month.

The median price of a vacation home was $150,000 in 2010, down 11.2% from a year earlier, the National Association of Realtors reported Wednesday. In contrast, the national median for primary residences fell only 4.5% in 2010, according to NAR.

While it may be hard to find a vacation home somewhat near the Bay Area close to the national median of $150,000, it may be easier if you head farther out. The average second home owner lives about 375 miles from their primary home, which is just shy of the distance from San Francisco to LA.

The typical vacation-home buyer in 2010 was 49 years old, had a median household income of $99,500 and purchased a property that was a median distance of 375 miles from his or her primary residence; 31 percent of vacation homes were within 100 miles and 41 percent were more than 500 miles.

http://homesinestes.com/distressed/

Wanting a mountain getaway?

One consideration for those on the vacation home fence is the possibility of using the second home as the primary residence sometime in the future, such as the retirement years. The NAR report mentions that 34 percent of second home owners plan to use their property as a primary home at some point in the future. In the meantime, there’s also the possibility of getting some help on the mortgage from rental income. Then again, it doesn’t appear that many of those who are in the position to afford a second home need any assistance with the monthly bill. More than a third of second home purchases – 36 percent to be exact – are purchased with all cash.

Are you considering a second home? Where and what’s going to get you to dive in?

Posted By: Jenny Pisillo (Email) | April 04 2011 at 02:10 PM

Listed Under: Second homes

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Article source: http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=86319&tsp=1