Mortgage rates are rising: Here’s what you should know
After a sustained run of historically low interest rates, most financial professionals and realtors expect mortgage rates to begin climbing upward in 2022. This is due to several factors, primarily the strong economy and recent inflation.
Anticipated higher interest rates mean that if you have not yet refinanced your home, or if you are looking to buy a home, now is the time to act. As interest rates increase, the sooner you can lock in an interest rate, the better. An experienced realtor and mortgage banker can help secure the most attractive rate possible based on your unique circumstances, but there are a few things you can also do to speed the process and ensure you get the best available rate.
Meet with a mortgage banker.
If you are not sure what your current interest rate is or if refinancing is the right decision, contact a mortgage banker for insight. They can review your existing loan and offer advice to help guide your decision, at no cost to you. In the market to buy? Mortgage bankers can provide guidance for improving your credit score and assist in identifying financial resources to help you reach this milestone.
Build up your credit and savings
Many people do not regularly check their credit scores and are surprised when they attempt to make a large purchase, only to discover their credit is not as good as they thought it was. Saving for large purchases while managing monthly expenses can also be challenging. A good rule of thumb is to first build emergency savings to fund three months of expenses and then focus on paying down high-interest debt such as credit cards. This will provide you a cushion to weather rainy day events and help improve and maintain a good credit score. When you have accomplished those goals, start building your savings for major purchases, such as a down payment.
Utilize community-based resources
Some neighborhoods offer down payment assistance or loan benefits to attract buyers. Other programs provide profession-based home ownership assistance, such as for public service workers or schoolteachers. A skilled mortgage banker can help you identify potential programs and guide you through the application process.