Today’s real estate market continues to be a busy one, thanks in part to mortgage interest rates that remain near historic lows, allowing buyers to afford more home. Despite this, it’s still important to watch interest rates to ensure you get the best deal.
1. ACT FAST
Lock in an interest rate today. There’s no sense pining over rates of yesterday because they are old news and unlikely to return. If you’re nervous your home won’t close in the typical 30 days, pay to extend your rate lock.
2. GRAB A DEAL
Even with slightly higher interest rates, your buying power is still strong. The difference between an interest rate of 4% and 4.5% on a $200,000 30-year mortgage is only $58 more per month.
3. SCALE BACK
If your proposed mortgage payment makes you nervous, step back and think about finding a home with a smaller price tag. You may have to give some on space and/or location but your monthly budget will thank you.
If you aren’t sure how long you’ll be living in your next home, consider a hybrid or adjustable-rate mortgage (ARM) that offers an initial fixed lower rate for a specific amount of time (three, five, seven years, etc.) before a single adjustment or annual changes.
5. GOOD SIGNS
Closely examine the area where the home is located. An improving local economy with stable and increasing jobs, vibrant schools and nearby conveniences increases the likelihood that the home will appreciate over time. Besides your home being a great place to live, you might also make a profit when it comes time to sell!