In the last few weeks, the average 30-year fixed mortgage rate from Freddie Mac inched up to 5%. While that news may have you questioning the timing of your home search or refinance, 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 rates are forecast to continue rising in the year ahead.
If you’re thinking of buying or refinancing to pull cash out of a home, here are a few things to keep in mind so you can succeed even as mortgage rates rise.
How Rising Mortgage Rates Impact You
Mortgage rates play a significant role in your home loan. 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):
With mortgage rates on the rise, you’ve likely seen your purchasing power or comfort level impacted already. Instead of delaying your plans, today’s rates should motivate you to purchase or refinance to take cash out 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 mortgage loan originator now. A loan originator can help you adjust your options based on your budget and make sure you’re ready to act quickly. Serious buyers or homeowners who would like the cash to, say, make home improvements or consolidate debt, should approach rising rates as a motivating factor to act sooner, not a reason to wait. Waiting will cost you more in the long. Connect with a loan originator so you can better understand your budget and be prepared to make your next move before rates climb even higher.
Stress Less About the Uncertainties of Selling, Buying, and Financing a Home.
If you want to buy or finance a home this year, current market conditions may feel stressful. But there are opportunities for you to make your next move. When you rely on a trusted professional for information and allow someone to help be your guide, you can make the best decisions for you and your family.
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Article content courtesy of Keeping Current Matters.