How Buyers Can Survive Rising Interest Rates

How Buyers Can Survive Rising Interest Rates   Here are three easy methods to deal with rising interest rates. “I want to purchase a home, but how can I deal with higher interest rates?” Many clients have reached out to ask me this question recently. In case you don’t know, the Federal Reserve recently raised rates by 75 basis points—the largest increase since 1994. Mortgage rates have already responded, and they’re likely to increase further throughout the year. Rates are still low historically, but there’s no denying that recent increases make it more difficult to purchase a home. If you’re looking to buy, what can you do?  Fortunately, there are tons of creative ways to adjust your strategy and prepare for higher rates, and I want to share three of them with you today: 1. Improve your credit. You may think your credit score is already as good as it can be, but there is always room for improvement. Start by paying off your debt little by little. This will lower your debt-to-income ratio, which is what lenders use to determine your creditworthiness. You can also save up for a bigger down payment to improve your credit and lower your rate. The results may seem small, but even a tiny difference can add up to a huge amount over the course of a loan.  “The longer you wait, the more expensive homes will become.” 2. Lock in your mortgage rate when it makes sense. If your lender is offering you a good rate, consider locking it in. Rates are expected to continue rising to combat inflation, but you won’t have to worry about that if your rate is locked in. Just remember that it only makes sense to lock in your rate when you’re almost to closing. Most rates only stay locked in for one to two months.  3. Pay mortgage points at closing. Also known as “discount points,” mortgage points are fees you can pay to lower your interest rate. One point typically costs 1% of your loan, so a point on a $200,000 mortgage would cost $2,000. A nice perk of mortgage points is that they might be tax-deductible. If you can deduct your mortgage interest, chances are you can deduct the cost of your mortgage points as well.  The truth is that it is still a great time to purchase a home. When the last Fed hike this large happened in 1994, rates were close to 8%, so our current ones look great by comparison. However, most experts believe rates will increase throughout 2022. On top of that, nothing indicates that rising mortgage rates will cause home prices to drop since inventory is so scarce. The longer you wait to purchase a home, the more expensive it will be.  If you’d like to take a look at what’s presently available on the market, you can view our multiple listing service here: Click here to see all available homes in your area. There are still plenty of opportunities in our market. If you have any questions about interest rates or purchasing a home, please call or email me. I am always willing to help!   Written by Ruby Miranda on November 28, 2022. Posted in Buyer TipsTags: Ultimate Home Buyers Guide Trackback from your site. Leave a Reply  

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Contingent vs. Non-Contingent Offers

Contingent vs. Non-Contingent Offers   How is a contingent offer different from a non-contingent one?  What’s the difference between a contingent and a non-contingent offer? Understanding these two types of offers is more relevant now than ever since we’re in such a tough market for buyers. A contingent offer means that to purchase a home, you need to sell your current one first. This usually happens when a buyer needs the funds from the home sale for their purchase. On the other hand, a non-contingent offer means you don’t need to wait to sell another home to purchase a new one. It’s usually more attractive to sellers since they often make a more straightforward and smoother closing process. There’s a high chance that your contingent offer will be rejected for a non-contingent one.  Currently, the real estate market is hot, and most homes are going under contract with multiple offers. If you make a contingent offer on a home now, there will likely be non-contingent offers competing with yours. Unless you’re planning to offer the highest bid, your contingent offer will probably be rejected for a non-contingent one.  However, making a non-contingent offer in the current market is not a hopeless case. Don’t give up yet. I have several strategies I suggest to my buyers to make their offers stand out and win their dream home. If you’re considering taking advantage of today’s market and want to learn more about how I can help you craft a winning offer, don’t hesitate to call or email me. I’ll be happy to help!   Written by Ruby Miranda on July 15, 2022. Posted in Buyer Tips, Uncategorized Trackback from your site. Leave a Reply  

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How To Decide Whether To Buy or Sell First

How To Decide Whether To Buy or Sell First   How to decide whether you should buy or sell your home first. In today’s real estate market, low inventory and high demand are dominating the conversation. It’s easy to sell, but it’s much harder to buy. Many homeowners are in a position where they need to complete both transactions in a short period. Deciding which one to do first comes down to several factors. Each route comes with pros and cons, but the right option for you depends on your particular situation. If you need to sell your home and buy a new one, here are three key questions that you should consider before starting the process: 1. Can you afford two mortgages? If possible, most people choose the buy first, then sell option. However, qualifying for two mortgages at once is difficult and can add a lot of stress to your situation. If you can carry both payments for a few months, you’ll have plenty of time to find a new home while also preparing your current property to sell for top dollar. There is more than one way to sell before you buy and vice versa.  2. What type of home are you buying? If you have a specific neighborhood or school district that you’re targeting, you can’t always afford to sell first from a timing perspective. You might need to make a contingent offer, use a bridge loan, or take out a home equity line of credit. It might be worth it to secure your dream home. If you don’t have a super-specific wish list for your next home, selling first might make more sense for a multitude of reasons. 3. Do you want to move twice? Most people don’t, but you might not have a choice. If you need the money from your home sale to fund your subsequent purchase, you may have to find temporary housing while you search for your next property. With rent on the rise due to inflation, that’s not always the wisest move. On the other hand, depending on how high demand is in your specific price range, you may be able to negotiate a rent-back agreement with the buyer who purchases your home and avoid the dreaded double move. We’ve helped many clients in this situation, and we’d be happy to help you too. There is more than one way to sell before you buy and vice versa.  If you have any questions about your specific situation or real estate in general, don’t hesitate to reach out via phone or email. We look forward to hearing from you soon.   Written by Ruby Miranda on June 10, 2022. Posted in Buyer Tips, Seller Tips Trackback from your site. Leave a Reply  

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