In the last few weeks, the average 30-year fixed mortgage rate from Freddie Mac inched up above 5%. While that news may have you questioning the timing of your home search, the truth is, the time may be right now. Even though it is tempting to put plans on hold in hopes that rates will fall, waiting will only cost you more. If you’re thinking of buying a home, here’s what to do when mortgage rates increase.
Set a Realistic Budget
Mortgage rates play a significant role in your home search. As rates go up, they impact how much you’ll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. Here’s an example of how even a quarter-point increase can have a big impact on your monthly payment (see chart below):
Don’t Wait to Buy
Serious buyers should approach rising rates as a motivating factor to buy sooner, not a reason to wait. Waiting will cost you more in the long run. Work with the Ultimate Lending Team to understand your budget and how you can be prepared to buy your home before rates climb higher. Instead of delaying your plans, today’s rates should motivate you to purchase now before rates increase more. Use that motivation to energize your search and plan your next steps accordingly.
The best thing to do when mortgage rates increase is to work with the Ultimate Lending Team now. We can connect you with a trusted realtor, help you adjust your search based on your budget, and make sure you’re ready to act quickly when it’s time to make an offer.