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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.
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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 runout 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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