Less is
more
If you're new to investing or real
estate and don't know the first thing about interest rates, here's
a good tip: the higher the interest rate, the more expensive
it's going to be. High interest rates mean you will have to pay
back more on the money you borrow. Another good rule of thumb
is that affordability increases if you use an adjustable rate
mortgage (it's easier to qualify this way). Of course, there
will be a wide range of prices that you can choose from, depending
on what kind of financing you choose..
Not even the Fed knows for
sure
The Fed holds a considerable amount
of power, but they can't control everything. Mortgage interest
rates are affected by many unpredictable political, economic
and social events. So there is no guarantee what direction interest
rates will go, despite the forecasts of the experts. Therefore,
make your financial decision based on where things are today
including your budget, your needs and your future plans.
Locking in rates assures
your lowest interest
If you do decide you want to lock
in at a certain interest rate, you will need to complete a loan
application and send it to your lender as soon as possible. This
must be done so that your commitment doesn't runout before your
loan is approved. Follow up and be se sure that the lender is
receiving all of the necessary documentation. Get a property
appraisal, which usually costs about $300, through your loan
agent as soon as possible.
Don't obsess and miss a good
real estate deal
Although rising interest rates can
create more problems for home buyers, waiting and hoping for
low rates is not necessarily a smart move. You may end up paying
a higher price. Also, refinancing is always an option in the
event that interest rates come down.
