Three Ways to Buy a Home When Interest Rates Are High

Mortgage rates are climbing. And at least for now, they show no signs of a quick decline. According to Go Banking Rates, in November 2022, rates had risen to 7.08%, but rates have trended downward since, reaching 6.79% on June 1.

So what can you do if you want to buy a new home now? The short answer is RRR - reevaluate your must-haves, do your research, and refinance!

Reevaluate What You Can Afford

Buying a home with a lower list price is one way to cope with higher mortgage rates. But remember that a lower list price doesn’t mean you’re settling for “less” of a home.

Sit down and reevaluate your wants vs. needs when it comes to a home. Do you have the capacity to buy a home that needs a DIY approach? Maybe you don’t need those three bedrooms. How big of a kitchen do you really need?

The point here is to really evaluate your wants vs. needs in your new home.

Research Mortgages

When buying a home during high mortgage rates, it’s essential to do your research. Make sure you’re not only researching types of mortgages but shopping around for mortgage agents as well.

Shop around for mortgage agents and compare the rates they provide you with. And you can always ask your real estate agent to guide you through the process!

While you’re shopping around, don’t forget to compare the different types of mortgages as well. This includes conventional, FHA, jumbo, and fixed-rate, to name a few. But keep in mind that each loan option comes with different requirements. Discuss your options with your mortgage agent and decide what works best.

Refinance Your Mortgage

Refinancing once interest rates decline is another option. However, there’s no guarantee that rates will eventually decline. If refinancing is your plan, make sure you can afford your current mortgage payments and have a plan in place if mortgage rates don’t decline.