Interest rates are shooting up to the highest numbers they’ve been in years. This means that borrowing money can be expensive, especially if you are interested in buying a home. So, what are your options when the rates go up? Should you rent for another year or two? Wait, this is actually how it works for most people. If rates go up, they refuse to buy, which is actually the plan.
When home prices go up too quickly, the only way to slow it down is to slow down the buyers. The best way to do that is by raising interest rates and making it too expensive to borrow money. While this is something that will cause most buyers to walk away, there could be some advantages that you are missing out on.
Why Buying Now Is Smart
Imagine there’s a beautiful home in a neighborhood you love and you’ve checked it out multiple times and the price is just too high. However, after months and months, that house remains on the market. It’s not because there is something wrong with the property or because the asking price is too high. The simple reason it’s still available is because of the increased rates. The question then becomes, are you really going to let a thing like interest keep you from your dream home?
Properties are already down 10% or more in some areas. Considering how desperate these sellers are right now, there’s no reason you cannot get a deal done at a much cheaper price. In fact, some buyers are able to get their property for tens of thousands of dollars cheaper, making and inflated mortgage prices worth considering. Now is the time to get that property. It may not be as cheap as you would have hoped, but the good news is you will have far less competition and the ability to make demands during negotiations.
Being Realistic
While there are several advantages for buyers right now including minimal competition, desperate sellers and more, the fact is that because rates are up, that does mean you will have to pay more per month. Adjustable rates loans are an option if you wish to consider that as a way of getting the payments down if and when rates are lowered. However, the key thing to remember is that you should never pass up the right property, especially if it is on the market at a time when you want to buy. Even if you have to pay more in interest, the ability to cut down the price significantly is key and can make up for much of the money you’ll lose through the first five years of inflated payments.
Millions of homeowners planned on selling their properties over the next 24 months. That number has been cut down significantly as many are now wondering what the home prices will be and whether or not there will even be a competitive market. Yes, there are disadvantages for borrowing money right now. However, this is also the time when true bargains can be found. People who need to sell there home are going to work with you and as a buyer, that cannot be overlooked.
