Navigating Interest Rates as a Buyer
You've spent the last 6 months swiping through house after house on our website or realtor.com and you're ready to finally take the plunge and buy.
But now you're hesitating because you've heard interest rates are on the rise.
There are two main things every buyer needs to understand about interest rates.
1) They're always changing.
2) You're not stuck with one rate forever.
Let's break down number 1. They're always changing. Sometimes they go up (like they are right now!) and other times they go back down! According to NAR, they are projected to continue to rise throughout 2022, so if you're waiting for them to drop so you can buy something before the end of the year, it's probably not going to happen.
Which brings me to number 2. You are not forever stuck with the interest rate you have at closing. Ask your lender about the process of refinancing in the months and years ahead when interest rates COULD drop again.
This means that maybe you buy a home this year at a 5% interest rate (which, btw, historically is still REALLY good !) But next year, your lender could call you and say, "Hey, rates are going back down right now, and for X amount of dollars, I could get you guys locked in at 3.9%."
So yes, there is some cost associated with refinancing, BUT it's usually pays for itself in a short amount of time with the money you end up saving on interest. *These numbers are completely hypothetical, please consult with a local lender to determine your specific options!
Bottom line: there is a chance the higher interest rates have made what you really want no longer affordable. If that's the case, keep saving up money for a bigger down payment and let's watch for rates to drop. But, if you are still able to afford the kind of house you want at a higher interest rate, go for it! The higher rates are keeping some buyers away, so there will be less competition. And you can always refinance when the rates drop!
As always, message me with any questions! I'm always a DM away!