Just when you thought the housing market couldn’t get any tougher, it throws another obstacle at you.
Mortgages are getting more expensive. Interest rates on mortgages just climbed over 6%, the highest they’ve been in 14 years.
In today’s turbocharged housing market, with its alarmingly high prices, this doesn’t make affording a house any easier. We’ve got four important tips for what you can do about it.
How High Are Mortgage Rates?
Here’s what’s going on with mortgages:
Because of high inflation, the average interest rate on a 30-year mortgage hit 6.02% in mid-September, according to Freddie Mac. That’s more than double compared to this time last year, when it was 2.86%. More than double!
CNN has a good example of what this means in real life:
“A year ago, a buyer who put 20% down on a $390,000 home and financed the rest with a 30-year, fixed-rate mortgage at an average interest rate of 2.86% had a monthly mortgage payment of $1,292.
“Today, a homeowner buying the same-priced house with an average rate of 6.02% would pay $1,875 a month in principal and interest. That’s $583 more each month.”
Yes, $583 more per month!
Here’s What You Can Do About It
Buying a house just keeps getting harder and harder. We’ve got four strategies for how to handle the rise in mortgage rates:
1. Check Online for the Best Rates
While some people may choose to work with a mortgage broker to find the best interest rate available, shopping for rates online is another good option — especially if you have a relatively straightforward financial profile.
Shopping for mortgage rates online is all about taking advantage of multiple resources and comparing your offers before making any decisions.
By entering basic information like your name and credit score into third-party sites like LendingTree or NerdWallet, you can learn what mortgage rates you may qualify for. While you can’t borrow from these sites directly, they can provide an…