Buying A Home In A High-Interest Rate Environment
TRAY SCHMIDT - REALTOR®
For most of the last decade, interest rates were low, and home prices were high, which meant people could afford a house if they could get financing. However, inflation has heated up over the past few months, and interest rates have followed suit. If you're looking to buy a house in 2023, the interest rates will likely be higher than last year. Here are a few things to keep in mind:
High-interest loans can present challenges if you're trying to get approved for financing. It's important to know where your credit stands before you begin shopping for a mortgage.
High-interest loans may not make financial sense because of higher monthly payments. Don't fall into debt that can't be repaid without causing financial hardship later down the road.
But don't let these deter you from moving into your new home this year; there are positive changes as well:
Home prices have come down/stabilized compared to the last 2-3 years allowing buyers in all price brackets to have a better chance of getting a property below the list price.
Multiple bid situations tend to be less common while interest rates are higher.
Feel free to shop around for lenders who can provide you with loan estimates based on their interest rates, terms, and experience.
And before you start house hunting, be realistic about your budget and what you can afford. Your income and expenses will dictate the monthly payment amount that you can afford. Consider all your debt when deciding how
The bottom line: Rates may be high, but you are less likely to overpay or have to compete for your dream house. Having an expert guide you through the process can ensure you make wise decisions. It is possible to purchase a home during these high-interest rate times!
