Understanding the relationship between mortgage rates and the amount of home you can afford to buy is extremely important. Today’s rising mortgage rate environment could limit this purchasing power.
The current average 30-year fixed mortgage rate is above 5%. Since experts say that it is likely to increase in the near future, you have opportunity to get ahead of that increase if you buy now.
You are more likely to exceed your target payment range as mortgage rates increase, unless you pursue a lower home loan amount. This can be motivation to purchase now. Rather than make the decision to decrease what you borrow in order to stay comfortably within your budget, consider the advantage of buying now before rising rates force that to happen.
Experts recommend that buyers get pre-approved with where rates are today and also consider what would happen if rates were to rise even a fraction of a point. Note how comfortable it would be to adjust your budget in the event of rising mortgage rates.
Now more than ever, it’s important to have a strong plan. Connect today with a trusted real estate advisor like Dennis Hartley and a lender on your side. Partnering with such a team will create a sound strategy for achieving your homeownership dreams.