A FEW POINTS ABOUT INTEREST RATES
Less is More
If you’re new to investing or real estate and don’t know much about interest rates, here’s a simple tip: the higher the interest rate, the more expensive your loan will be. High interest rates mean you will pay back more on the money you borrow.
Another rule of thumb: affordability often increases if you use an adjustable-rate mortgage, as it can be easier to qualify for. Of course, there are a wide range of prices depending on the financing option you choose.
Not Even the Fed Knows for Sure
The Federal Reserve holds considerable power, but they can’t control everything. Mortgage interest rates are affected by unpredictable political, economic, and social events. This means there’s no guarantee which way rates will go, despite what the experts forecast. Make your financial decisions based on today’s reality, including your budget, your needs, and your future plans.
Locking in Rates Assures Your Lowest Interest
If you decide to lock in a specific interest rate, you will need to submit a loan application to your lender as soon as possible. This ensures your rate commitment doesn’t expire before your loan is approved.
Follow up to make sure your lender receives all necessary documentation, and get a property appraisal—usually costing about $300—through your loan agent promptly.
Don’t Obsess and Miss a Good Deal
Although rising interest rates can create challenges for homebuyers, waiting for rates to drop isn’t always the smartest strategy. You might end up paying a higher price for the property. Remember, refinancing is always an option if interest rates decrease later.
