Interest rates are up right now. It is not the decision of any president or elected official. The Fed covers these decisions in order to keep as much of our economy out of the control of either side of politics. It’s a smart move and an even smarter one was to increase rates in order to slow down the buying of houses and other goods. The constant buying, even at inflated prices, were putting people in major debt and allowing inflation to skyrocket.
In order to combat inflation the Fed raised interest rates. While it’s understandable to feel like they have not been successful, they actually have been. They kept the bubble from popping and our economy is still doing well. Yes, there are people who are struggling because of the cost of living but the consumer dollar and job market remain strong, as does the housing market.
Buying a home with inflated interest rates can be tricky. A traditional mortgage now will cost you hundreds of dollars more a month. For many, that makes a home unbuyable because of the debt-to-income ratio. However, thanks to the help of some creative buyers and clever realtors, there are some growing trends that can help you get your home at a price you can afford.
Assumable Mortgages
One of the newest trends that is gaining popularity are assumable mortgages. A buyer wants to buy a home and the owners have a mortgage on it with a good rate. The buyer can assume the mortgage and take out an additional loan to cover the rest. This would significantly cut their monthly costs down as well as help give the sellers fair market value.
While this seems like a great option it does not apply to every property either because of the numbers or the type of mortgage still on the property. That’s why it’s important to consider this an option but not your main strategy for buying. If the right deal comes along, this option can benefit you a lot.
Rent-To-Own
Another option that’s been around for decades and is getting more popular is rent-to-own. The conditions can be different but can include a downpayment and monthly payments for the property. Instead of paying a bank, you are paying the owner directly. They will keep their name on the property until you pay in full. However, that may be a good thing considering it can keep taxes and insurance down.
There are ways to get a house at an affordable price. However, it’s not so much the property as it is the seller and their situation. Talk to your realtor about options and see what properties are up for unique buying conditions. It’s a great way for the owner to get full asking price and for you to save big on the interest.
