So you’ve gone back and forth on whether or not it’s the right time to buy a home. With most experts reporting that mortgage rates will continue to increase in 2018, now may be the time to make your move.
For prospective homebuyers, rising rates might put some pressure on finding a home sooner than later. The reason? Your rates are unlikely to get better than they are right now. After years of a fixed 30-year mortgage interest rate below 4 percent, rates continue to tick upward. For instance, the average interest rate on conventional, 30-year fixed-rate mortgages of $453,100 or less was 4.64 percent in May 2018, up 10 basis points from 4.54 in March.
To avoid anxiety over rising interest rates, here are a couple of things you can do to get the ball rolling.
- Lock in your rate. The term, also known as a rate lock, means that your interest rate won’t change between the offer and closing, as long as there are no changes within your applications and you close within the specified time period.
- Edit your price range to reflect the rise. A higher mortgage rate inevitably brings higher monthly payments. For example, a 0.5 percent higher mortgage rate can equate to more than $100 of additional payment each month. When searching for a home, give yourself a realistic range of home prices that will still allow you to purchase the type of home you desire without breaking your budget or pocketbook. In the same token, increasing rates may force you to revise your price to a lower range. Try our calculator to figure out what your monthly payment could be with different interest rates and terms.
To better understand your options, chat with a member of the Elevations Credit Union Mortgage Team. At Elevations, you are never put through a cookie-cutter process. We are happy to discuss how rates will directly impact your home buying process and the best options for you