If you’ve been holding off on buying a home, now may be the right time to take the plunge. Otherwise, you risk paying far more for the same house in the future, according to The Wall Street Journal.
Since May, industry experts and market watchers have noticed a continuous upward trend for interest rates on mortgages. Each month, rates have steadily been rising. While interest rates have been rising at a slow, steady rate, the increases add up over time. For example, average rates in May were 3.59% on 30-year fixed-rate mortgages. By the end of August, average rates had climbed to 4.73% according to Forbes. That may not look like much of a difference on paper, but in practice, that translates to a 15% increase in monthly payments for homeowners. If rates continue to climb at this rate, next year’s homebuyers could pay 30% more every month on their mortgages than those who took out their mortgages earlier this year while rates were low. In order to secure the best deal possible on your mortgage, it’s wise to start shopping for a home – and a lender – sooner rather than later.
However, it’s important that you don’t become discouraged as you see mortgage rates rise. Forbes reports that buying a home is still 35% cheaper than renting in all 100 of the major metropolitan areas across the country – despite the increase in interest. While waiting to buy could cost you more on your monthly payments, you’ll still be paying less than you would in rent – and investing in a property you’ll own forever, something renting doesn’t offer.
And remember, if you’re a first-time buyer or meet other qualifications, you can always finance your home with a mortgage backed by the Federal Housing Administration, or FHA. When market watchers report on increasing interest rates, this applies primarily to mortgages given out by private lenders.
Of course, homebuying can be a daunting process. You may worry about securing a down payment, getting your credit into shape, finding a home that fits your budget, and deciphering real estate lingo overwhelming. Fortunately, we’re here to help! We offer a wide variety of resources to make homebuying a breeze for our customers, including credit counseling, no money down financing for qualified buyers, a wide variety of floorplans to choose from in four states, and a comprehensive guide for first-time homebuyers.