Should I Buy A Home If Interest Rates Rise?
You may ask this question and get ten different answers. Just because the interest rates have risen does not necessarily mean it is not the right time to buy. If you hold off, this mistake could cost you thousands.
So how do you know when it’s ok to buy a home if you know the interest rates are rising? Well, that is a good question and here are some facts to help you sort through it all.
1. Consider specialty loan options
• Hybrid mortgages – this is a mortgage loan that will offer a very low rate for a fixed amount of time, usually 5-7 years, then the loan will revert to an adjustable rate mortgage. This sounds a bit risky; however, if you are not planning on staying in your current home for more than five years, this is a fantastic option for you
• An ARM loan with an option that would allow it to be converted to a fixed rate loan when at the borrowers discretion
• An interest only loan – this is a loan that requires you to make payments to the interest only for a set number of years, then it converts to an amortized loan with interest and principal payments each month
2. Talk to a tax advisor – before you do anything, make sure you talk to your tax advisor about whether or not one of these types of loans is right for you.
3. Ask for a Buy Down – this is a fee paid at closing to get a lower interest rate. Sometimes a motivated seller will be willing to paying some if not all of the buy down just to get the deal.
4. Ask the seller to pay some or all of the closing costs. Quite frequently the seller’s closing costs are used as a write off by the buyer. (Check with your tax advisor before doing this)
5. Lower prices mean lower loan amounts so don’t let higher interest rates chase you off. With some skillful negotiating your realtor can help you secure an unbelievable deal saving you loads of money. So a high interest rate does not have to mean more money.
Remember, many people drop out of the home buying market when the interest rates go up, but as you can see this could be a very costly mistake. Some of the best mortgage loans come about when the lenders are competing for your business and when sellers are realizing that there are more homes for sale than there are buyers.
So talk with your realtor and come up with a game plan to help you find your dream home. Don’t let rising interest rates stop you, use it to your advantage!
Having the right real estate agent means having an agent who is committed to helping you buy, sell or rent your home with the highest level of expertise in your local market. This commitment level has helped me build a remarkable track record of delivering results.
Nothing is more exciting to me than the gratifying feeling I get from helping people meet their real estate needs. You can count on me to always do what’s in your best interest. I pride myself on being honest, trustworthy, and knowledgeable in the real estate market. I know how important it is to find your dream home. Therefore I will make it my responsibility to help you achieve those goals.
Whether you are an experienced investor or a first time buyer, I can help you in finding the property of your dreams. Please feel free to browse my website or let me guide you every step of the way by calling or e-mailing me to set up an appointment today.
About the Author: Millie Gil has been a successful Licensed Real Estate agent for over 25 years in Florida. Millie is Vice President of Bold Real Estate Group, a boutique agency committed to concierge personalized service for discerning buyers, sellers and renters of residential and commercial properties. For more information please forward your request to communityinfo@comcast.net
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