How to Navigate Inflation and Land Lower Mortgage Rates

Many real estate agents, mortgage lenders and home buyers are concerned about the current rising inflation and mortgage rate increases. As predictions seem worrying, it is increasingly more important for buyers to make informed and careful decisions when applying for new mortgages.

The Grim Reality of Mortgage Rate Increase

Rising inflation has caused mortgage rates to increase at the beginning of the year more than they have in the past 28 years. Going forward, predictions seem to be somewhat negative for the real estate market, especially for those homeowners who don’t have a high income or a very good credit score. Although the NAR says that mortgage rates may have peaked sometime in the middle of June, right around the 5.50%-mark, home buyers are still concerned about the fact that rates are not going down at all.

In the current real estate climate, it makes sense to look up how to finance a new home purchase with minimal long-term costs by landing better rates. Buying a new home is probably the most important decision you’ll make in the next few decades, so you have to make sure you get it right.

 Aiming for the Wisest Choices

When we aim to purchase a new home, the outcome will inevitably depend on the circumstances, but it will depend even more on how we tackle them.

Shopping around is still the main way to find lower interest rates, and comparing rates will increase the likelihood that you’ll find the right offer among fluctuating offers. The VA (Veterans Affairs) and FHA (Federal Housing Administration) also have advantageous offers if you’re eligible, with some lenders making the process more convenient by keeping closing costs low.

Long-term loans can be chosen over short-term mortgages to keep interest rates lower as well. A 15-year mortgage might be great for paying off your loan faster, but right now a 30-year mortgage will ensure payment relief and lower rates, as well.

Finally, it’s a good idea to save up for a large down payment and work on improving your credit score. Credit score shows lenders whether or not you’re at risk to fall behind on payments, and your down payment makes it so you’ll owe less over time.

This article has been shared by Team Front Range Northern in Erie Colorado.