Are High Interest Rates Discouraging you from Buying a House? What do you do when you are ready to buy but the high interest rates have you discouraged? You get creative. The typical mortgage for buyers to obtain when purchasing, is a thirty year fix rate mortgage. There are other mortgage options available. When interest rates are high you might be better off obtaining an adjustable mortgage, with a lower interest rate. If that sounds scary, it shouldn’t. There are loan programs out there including a seven year ARM? This loan offers an interest rate that stays fixed for the first seven years of the loan. In real estate you will hear agents say, you date the rate and marry the property. What this saying means is that you find the house that you love that you can live in for a long time and you refinance to bring your rate down when rates drop. There are other options available.
Explore other loan options
There are other loan options that will provide a lower the interest rate on the mortgage for awhile. An option available is called the 3/2/1 buy down. This mortgage works by having the interest lowered for the first year, then going up the second year and the third year, the loan is at the rate it will be for the life of the loan. As an example the rate for the first year might be four percent.
The second year the rate goes to five percent and the third year the rate is at six percent. When you take out this type of loan there will be upfront costs. The upfront amount that you pay is the amount that the lender is not earning by reducing the interest for the first two years of the loan. The benefit is not long term. You need to make sure that you are able to comfortably pay the loan in the third year at the higher interest rate.
Don’t let high interest rates keep you from buying
Are High Interest Rates Discouraging you from Buying a House? Higher interest rates do not need to discourage you from buying a house. There are creative solutions for the higher interest rates that we are experiencing. First step is to meet with a knowledgable, trusted, creative mortgage loan officer to explore what might work best for you. Next, find a property that you love and a mortgage that will work for you until interest rates improve. When interest rates drop, then refinance your loan. Don’t let the interest rate keep you from buying. Get into the market. Remember, if you need a recommendation for a good lender. Contact us!