Unless you’re one of the fortunate few who plan on using cash to purchase a home, you need to stay aware with what’s going on with the mortgage industry. Mortgage rates are indeed on the rise. But the good news is that they are still at record lows. Although they probably won’t stay at this level forever, you want to determine how the increasing rates may affect your future in the housing industry.
RUSHING TO PURCHASE A HOME
As rates begin to climb, those in the market for a new home typically rush out to purchase a dwelling. But most housing experts advise against this sudden yearning. Buying a home is a major investment, and you don’t want to make a mistake by purchasing something that you don’t want.
There should be a number of factors that go into your decision besides the interest rate. If you need to relocate, move up to something larger or downsize, then it’s probably a good time to start looking.
PUTTING A HOME ON THE MARKET TO SELL
Mortgage rates can also affect sellers who are wishing to place their home on the market. While you want to obtain the most money for your home at closing, you need to set a realistic price when listing your house. A seasoned real estate agent will be able to determine the right amount based on properties that are currently listed and those that have sold.
High mortgage rates may hinder the amount of buyers looking. But those who really need to buy a home will do so no matter the interest rate. You can do your part by giving your home the right curb appeal. Maintain a healthy lawn by having it seasonally aerated, fertilized, and treated to prevent diseases. A fresh coat of paint can freshen up your home’s indoor appearance. Make any necessary repairs right away before they become too problematic.
CURRENT LOAN PAYMENTS
High mortgage rates probably won’t be life-altering for most home owners. To see some kind of effect, the rates would have to hit beyond 9 percent before it becomes less costly to rent than purchase a home in many of today’s markets. But if you think you may need to buy a home in the next five years, there are ways to score a low interest rate. Programs such as an adjustable rate mortgage are low at the initial stages and rise after the fourth and fifth year.
HIGH INTEREST RATES AND HOME PRICING
If you’re looking to purchase a home when the interest rates are on the rise, you may not have a lot of competition. If you like a certain home, you may not have to worry about a lot of other bids on a dwelling. With a decrease in other buyers, you may get the sellers down even lower on their home price. But if the competition in a certain market is fierce, and the inventory is limited, the price of homes could still be high.
INTEREST INCREASES IN THE FUTURE
The Magic 8 Ball can’t foretell the future when it comes to mortgage rates. But experts in the housing industry see signs that there are additional rates increases by years end. However, the amount that they continue to climb will be minimal. If you’re concerned about the rate increase, the people most affected will be those who are already stretched to their budgetary limits. If you have a sizeable down payment and stay within the figures that you can afford, the mortgage rates shouldn’t be too cumbersome.
The rise in mortgage rates has proved worrisome for both buyer and seller. To avoid the worry that comes with the housing changes, you want to shop around for the best rate. If you no longer qualify for traditional methods because of the booming rates, just keep looking until you find the right mortgage lender you wish to work with.