Here are four reasons why buyers shouldn’t wait for mortgage rates to fall.
Rates Could Go Higher
Sure, rates are high now, but what happens if they rise even further? Don’t dismiss the possibility of additional rate hikes. Federal Reserve chair Jerome Powell has already implied that additional rate increases could be coming in 2023. If that doesn’t happen this month, then don’t be surprised if it comes around the holidays.
That could be devastating news for those buyers who were planning on timing the market to improve their rate offer. While a 7.5% interest rate isn’t anyone’s idea of a great deal, it could prove to be a desirable one when compared to the prevailing rate in November, December or even January 2024. Just ask those who locked in last year in the low 5’s at this time.
You May Lose Your Dream Home
Your dream home may only come on the market at one time, and it may not be during the most favorable rate environment. So don’t make perfect the enemy of good and skip out on the chance to buy the home.
“Date the rate and marry the home,” most experts advise. In other words: The interest rate you secure now is temporary and can (and likely will) be adjusted in the future. But the dream home available now could be gone forever. Adjust your purchase plans accordingly.
You Could Refinance in the Future
Mortgage rates and mortgage refinance rates are both elevated now. But they won’t be forever, at which point you could refinance to a lower rate and, potentially, even better terms.
So don’t feel like you’ll be saddled with a higher rate forever. While experts don’t agree on when rates will come down (and by how much), they all do agree that they will come down at some point — giving you an opportunity to take advantage and pay less.
The Rate May Not be as Bad as it Looks
Don’t get discouraged by the rate you find online. As an Independent Mortgage Broker, I find almost all of our rate quotes are quite a bit lower than the National Average. Make sure you check around and make sure you check with an Independent Mortgage Broker such as myself. There really is a big difference.
Often times, depending on the sellers situation you can even have the seller pay for a lower rate with a “Seller Buydown” : https://freshhomeloan.com/fresh-home-loan-inc-president-garrick-werdmuller-explains-what-a-seller-paid-rate-buydown-is/
The current market really is a great opportunity for first-time home buyers with a lower down payment to get into something.
For more information visit: https://freshhomeloan.com/home-purchase-2/
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