Homeownership is on the goal list for many young adults, but sometimes it’s hard to…
Rising mortgage rates are on the minds of home buyers everywhere. It’s no secret that mortgage rates have been on a roller coaster ride in the last few weeks. The historic lows we were seeing in 2021 and the first half of 2022 are no more, as recently the average 30-year fixed mortgage rate from Freddie Mac inched over 5%. While that news may have you questioning the timing of your home search, the truth is, timing has never been more important. Even though you may be tempted to put your plans on hold in hopes that rates will fall, waiting will only cost you more. Mortgage rates are forecast to continue rising in the year ahead.
If you’re thinking of buying a home, here are a few things to keep in mind so you can succeed even with rising mortgage rates.
How Rising Mortgage Rates Impact You
Mortgage rates play a significant role in your home search. As rates go up, they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. Here’s an example of how even a quarter-point increase can have a big impact on your monthly payment (see chart below):
With mortgage rates on the rise, you’ve likely seen your purchasing power impacted already. Instead of delaying your plans, today’s rates should motivate you to purchase now before rates increase more. Use that motivation to energize your search and plan your next steps accordingly.
The best way to prepare is to get pre-approved today. Your loan officer will review your unique financial situation and show you all the options that you have based on your information. As a bonus, Troy City Mortgage is a broker, which means we can pull your credit just one time and then shop your information for you with multiple lenders to get the best mortgage options for you. We’ll help you adjust your search based on your budget, and make sure you’re ready to act quickly when it’s time to make an offer.
Serious buyers should approach rising mortgage rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run, as we’ve seen historically. Let’s connect today so you can better understand your budget and be prepared to buy your home before rates climb higher.