In the last few weeks, the average 30-year fixed mortgage rate fromFreddie Macinched up to 5%. While that news may have you questioning the timing of your home search, the truth is, timing has never been more important. Even though you may be tempted to put your plans on hold in hopes that rates will fall, waiting will only cost you more.Mortgage ratesare forecast to continue rising in the year ahead.
If youre thinking of buying a home, here are a few things to keep in mind so you can succeed even asmortgage ratesrise.
How Rising Mortgage Rates Impact You
Mortgage rates play a significant role in your home search. As rates go up, they impact how much youll pay in your monthly mortgage payment, which directly affects how much you can comfortably afford. Heres an example of how even a quarter-point increase can have a big impact on yourmonthly payment(see chart below):
With mortgage rates on the rise, youve likely seen your purchasing power impacted already.Instead of delaying your plans, todays 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 way to prepare is to work with a trusted real estate advisor now. A Seven Gables agent can connect you with a trusted lender, help you adjust your search based on your budget, and make sure youre ready to act quickly when its time to make an offer.
Bottom Line
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. Connect with a Seven Gables advisor today so you can better understand your budget and be prepared to buy your home, before rates climb even higher.
