Interest Rates! What Just Happened?
The big conversation this week is all about interest rates. 😱 If you're planning on financing your next home purchase, I'm sure this news caught your attention.
Did you know? Fed funds rate increases do not equal mortgage rate increases? In fact, mortgage rates pulled back slightly this week.
How does that work? Mortgage lenders anticipate these kinds of hikes and usually have them baked in by the time the fed raises rates. And yes, rates are much higher than they were at the beginning of the year.
Should you buy now with the higher rates?
Home prices are currently expected to continue rising, so run your numbers or ask your lender to run the numbers for you to measure any higher payment due to rates against higher expected prices.
Also, talk to your lender about alternative loan programs. Adjustable rate mortgages currently have lower rates. This loan program got a bad rap during the Great Recession, but rates don't actually adjust for 5, 7 or 10 years, and then they adjust by a contractually determined amount. When the government gets recession worries under control and rates come back to earth, you can refinance.
Also, I have one lender advising clients to re-qualify. It looks like some lenders are pulling back on fees and points, which can make a higher rate make a little more sense.
Whatever your situation is right now, talk to a lender and start the qualification process to fully understand your options and ready yourself to take advantage of further rate dips if they present themselves.
Are you buying with cash or mostly cash? This is your moment! With so many buyers confused about interest rates, the buyer pool is smaller and you'll face less competition.
Need a lender recommendation? Text me on my personal cell phone and I'll send you names of terrific lenders who will take the time to help you understand all your options right now - 424.229.1634.
Rooting for you!!
Tracy