4 things to know about mortgages rates right now
Let’s talk mortgage rates – again. Obviously, they have been one of the main topics of conversation all year. After all, high rates have consequences for housing affordability and, frankly, buyers’ wallets.
Take this information from an article from earlier this month (using a rate of 7.72% for the following calculation). “For a borrower purchasing a $400,000 home with a 20% down payment on a 30-year fixed loan, the monthly payment today is about $930 more than it was when rates were at 3% (during the height of the pandemic.”)
That’s a lot of dough – and we don’t have to tell house hunters or our fellow real estate professionals what effect rising rates have on our markets. However, this blog is all about positivity – and giving our readers the tools and information to navigate these times. When we saw this piece about scary mortgage mistakes, we knew it could be the foundation for a great blog.
Here are four things potential borrowers should know going forward.
Interest rates will remain a conversation topic for the foreseeable future. Everyone has a prediction on what interest rates will be through the end of the year and into 2024. Some experts say they must come down, while others expect them to continue to rise or hover where they are currently for some time. So, it’s important to always keep an eye on them if you’re ready to buy and act fast to lock in the best rate when they fluctuate. Rates can – and do – change daily.
A local lender can provide important insight and flexibility. National banks and big online lenders may seem like the most convenient option for borrowers – and sometimes they are –but there are also plenty of loan officers in our community who work for smaller institutions. If you need recommendations for a good local option, we certainly have some to give.
Your credit score is always an important factor. If you are waiting for rates to come down, this tip is for you. Do everything you can to get your credit score as strong as possible. Keep paying those balances on time and don’t do anything out of the ordinary financially right before applying for a mortgage.
Remember, refinancing can be a future option. It may sound like real estate speak when you hear that the interest rate is temporary while a home can be forever, but it’s the truth. If buying makes sense now, don’t let high rates be your only deterrent because refinancing your mortgage whenever rates moderate can mean serious savings for the long term. So, keep regularly checking those rates even years after you’re in your home.
Here’s one extra piece of advice from the article. If you have the means to pay a little extra toward your mortgage’s principal some months, you should. It’ll save you bunches of money over the life of the loan and even shave literal years off your mortgage.
No matter what happens, there are plenty of real estate professionals who are ready to guide you to the right solutions, no matter how many twists and turns the journey has. Reach out to our teams anytime, and we’ll stay on top of this topic – and many others – for you.