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Less is more
If you're new to investing or real estate and don't know the first
thing about interest rates, here's a good tip: the higher the interest
rate, the more expensive it's going to be. High interest rates mean
you will have to pay back more on the money you borrow. Another good
rule of thumb is that affordability increases if you use an
adjustable rate mortgage (it's easier to qualify this way). Of
course, there will be a wide range of prices that you can choose
from, depending on what kind of financing you choose.
Not even the Fed knows for sure
The Fed holds a considerable amount of power, but they can't control
everything. Mortgage interest rates are affected by many unpredictable
political, economic and social events. So there is no guarantee what
direction interest rates will go, despite the forecasts of the
experts. Therefore, make your financial decision based on where
things are today including your budget, your needs and your future
plans.
Locking in rates assures your lowest interest
If you do decide you want to lock in at a certain interest rate, you
will need to complete a loan application and send it to your lender as
soon as possible. This must be done so that your commitment doesn't
run out before your loan is approved. Follow up and be se sure that
the lender is receiving all of the necessary documentation. Get a
property appraisal, which usually costs about $300, through your loan
agent as soon as possible.
Don't obsess and miss a good real estate deal
Although rising interest rates can create more problems for home
buyers, waiting and hoping for low rates is not necessarily a smart
move. You may end up paying a higher price. Also, refinancing is
always an option in the event that interest rates come down.
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