How Should You Approach Rising Mortgage Rates?
The average 30-year fixed mortgage rate from Freddie Mac has risen to 5% in recent weeks. While this news may make you reconsider your house hunt, the truth is that time has never been more crucial. Even if you're tempted to put off your plans in the hopes that rates would drop, doing so will simply cost you more money. Mortgage rates are expected to rise more in the coming year.
If you're considering buying a home, here are some tips to help you succeed even as mortgage rates climb.
What Effects Do Rising Mortgage Rates Have on You?
Mortgage rates are a big factor in your house hunt. As interest rates rise, so does the amount you'll pay in monthly mortgage payments, which has a direct impact on how much you can comfortably afford. Consider the following example of how a quarter-point rise can significantly affect your monthly cost (see chart below):
With mortgage rates on the rise, you've probably already witnessed a reduction in your purchasing power. Instead of postponing your plans, today's rates should encourage you to buy soon, before rates rise even further. Use that drive to re-energize your quest and make plans for the following steps.
Working with a reputable real estate advisor now is the best way to prepare. An agent can help you find a reputable lender, adapt your search based on your budget, and ensure you're ready to make an offer swiftly when the time comes.
Rising rates should be viewed as a motivator to buy sooner rather than a reason to wait for serious buyers. Waiting will ultimately cost you more money. Let's connect right now so you can better understand your budget and be ready to buy your property before interest rates rise.