In today’s market, buyers still have multiple options to offset high rates.
Last year, we saw the lowest interest rates in 30 years. Unfortunately, over the last eight weeks, rates have increased by one of the largest margins we’ve witnessed in a long time.
“Rising interest rates are cooling many buyers in our market.”
The average mortgage payment has risen by approximately 39%. Interest rates are currently hovering around 5.1%. This is discouraging for many buyers in our market, so what are their options? Here are five ways buyers can deal with rising interest rates:
- Instead of a 30-year fixed mortgage, they can look at a five-year fixed or seven-year fixed that will roll over to an adjustable-rate mortgage.
- Interest-only mortgage payments will lower your payments a lot, but you won’t be paying down nearly as much equity on your home.
- Ask the seller to do a seller carry, where they carry a note on the property, which is either interest-free or at a very low reduced interest rate.
- Putting a higher down payment will make your mortgage payment smaller.
- Paying points is also an option. A point is 1% of your loan amount. You can either pay the points or get the seller to pay the points for you. This will buy down your interest rate and give you a lower monthly mortgage payment.
These are only a few of your options. Buyers shouldn’t count themselves out of this market. If you have any other questions or want to learn more strategies, reach out to me by phone or email. I look forward to hearing from you.