A Buyer’s Approach To Rising Rates
Over the past two weeks, we have seen mortgage rates slowly tick up. With the exception of Black Friday’s news on the new virus variant, rates have ticked up slowly for days on end. Freddie Mac has noted that the 30-year fixed rate has climbed above 3%, reaching as high as 3.1%. While rates were only 2.9% in Q2 of 2021, experts predict that rates will continue to rise in the following quarters. With projections as high as 3.5%, you could lose thousands of dollars over 30 years with higher rates. Here is your buyer’s approach to rising mortgage rates in the coming months.
Why You Should Get Ahead
While many Americans are still on the fence about whether now is a good time to buy, mortgage rate history is one reason that they should consider buying. As stated before, rising mortgage rates can lead to thousands more paid per year, over 30 years. What many first-time home buyers and everyday buyers who do not follow the market closely don’t realize is: the longer you wait the more you will pay. Time is money, to be cliché, but the saying is true especially with the current real estate market.
Mortgage rates play one of the most significant roles in a buyer’s affordability. Rates should also play a significant role in the home search and is often overlooked by home buyers. With rates continuing to rise throughout the last months in 2021, your future monthly payments will also rise. Rates affects your ability to afford that home you have been looking at for weeks. Even with a .25% increase in rates, you are looking at close to a thousand dollars more per year depending on your loan type. With home prices continually surging all year, this significantly impacts your purchasing power. Couple rising rates with rising home prices and you are looking at a rough winter season for homebuyers.
How To Get Ahead Of Rising Rates
With some smart buying planning and a good professional in your corner, anything is possible. Making sure you are qualified to buy a home will help you stay qualified, no matter the mortgage rates. Taking action now can lock in your interest rate and help save you money in the long run. The Chief Economist at on of the most common real estate websites, realtor.com, has dropped some golden knowledge for current buyers. Danielle Hale said it best, saying: “Smart buyers SHOULD CONSIDER calculating monthly payment not only at today’s rates, but ALSO CONSIDER rates that are a bit higher so that they won’t be derailed by a sudden upward move.”
Being prepared for the future will help qualify you for any unforeseen changes. Getting a pre-approval letter now helps put any delays to rest. When the time arrives, being pre-approved and prepared to pay a higher mortgage rate will help you get into the house you want. Getting with a real estate professional now as well can help. Realtors can help link you with a qualified lender, help your home search, and even be ready to act quickly when it is time.
Rising Rates Bottom Line
Serious buyers will set themselves apart from the pack. Buyers should anticipate a rise in mortgage rates. If buyers will anticipate their rising rates, they will not be surprised when rates ultimately do go up. Time is the essence, and there is very little time to wait. Waiting is only going to cost money, so being a smart buyer nowadays will help you in the long run.