How you can still purchase a house even with these rising rates.
I know a lot of homebuyers who are getting increasingly concerned with all the news about rising interest rates. That’s why I want to talk through what these changes mean for you and how you should respond to them.
First, you need to understand what you can afford. Most first-time buyers are looking for homes between $75,000 and $150,000. If you bought a $150,000 home last year at the full FHA rate, your monthly payment would’ve been $1,014. With today’s interest rates, that same home would cost $1,181—a difference of $167 a month. I know that’s a difference you’d have to pay with real money, but it still allows you to secure a home and enjoy the advantages of homeownership.
Don’t be afraid of paying these interest rates; we’ve had rates higher than this many times. We don’t anticipate that rates will come back down. The Federal Reserve is trying to slow inflation, and they’re raising interest rates to do it. Don’t let these rates scare you out of buying a home.
Here are a few steps that can still help you buy:
1. Know what you can afford. If you already have a pre-approval letter, go back to your lender and make sure that it is still current.
2. Don’t look for a perfect home. Sit down and make a list of things you must have and things you could give up. This may not be your forever home, so don’t try to get everything you want.
3. Consider multi-family homes. If you can’t afford a single-family home, consider a multi-family setup. There are great houses in our area where you can live in one half and rent out the other to another family. This could be a good short-term solution. Think within the timeframe of five to seven years.
4. Always work with professionals. You need a professional lender, Realtor, inspector, and other experts on your side to buy a home.
I hope this calms your fears a bit. If you’re interested in talking more about your financing options or potential strategies, don’t hesitate to call or email me. I would love to help.