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The average 30-year fixed mortgage rate from Freddie Mac rose to 3.1% last week, and experts predict rates will continue to rise into 2022:
“The 30-year fixed-rate mortgage was 2.9% in the third quarter of 2021. We forecast mortgage rates to increase slightly through the remainder of the year and reach 3.0%, rising to 3.5% for the full year 2022.”
The following are a few things to keep in mind if you’re thinking of buying a home, even as rates rise.
Taking Time Off Can Be Costly
In your Denver home search, mortgage rates play a significant role. If you’re buying a home, an increase in interest rates will increase your monthly mortgage payment, affecting how much you can afford. A slight increase in your mortgage rate can significantly affect your monthly payment (see chart below):
Rates have likely impacted your purchasing power due to the rising mortgage rates. To avoid further increases in interest rates, you should now take advantage of today’s rates instead of waiting for them to fall.
Savvy Buyers Can Succeed by Planning Ahead
To ensure you act regardless of what happens with mortgage rates, you should use your newfound motivation to energize your search and plan your next steps accordingly. One way to do this is to include rising rates in your budget.
Danielle Hale, Chief Economist at realtor.com, puts it best, saying:
“Smart buyers should consider calculating a monthly payment not only at today’s rates, but also at rates that are a bit higher so that they won’t be derailed by a sudden upward move. . . .”
When you find a Denver home that meets your needs, be ready to act. It would be best if you got pre-approved by a lender so that there won’t be any delays when the time comes.
Taking the time now to work with a trusted Denver real estate advisor is the best way to prepare. By using an agent, you’ll be able to connect with a lender, adjust your search based on your budget, and be prepared to act quickly when the time comes to make an offer.
Rising rates should motivate serious buyers to buy sooner, not keep them waiting. Waiting will ultimately cost you more. Let’s connect today so you can better understand your budget and be prepared to buy your home even before rates climb higher.