November 2016 brought an end to an election cycle with which we are all familiar. However, the after effects was something with which home buyers and the lending industry didn’t see coming; a swift upward spike in mortgage rates. Home prices have been steadily trending upwards for quite some time, but they were offset by a low mortgage rate environment. But as of November 14, rates broke the 4.0% barrier – a target that experts hadn’t predicted happening until the middle of 2017.
What advice is there for home buyers caught between rising home prices and rates? The same as always… There is only one “right time” to buy a house: and that is when a person is ready to take the leap. The process begins with a buyer taking a long, careful look at their entire financial picture to determine if they are in the best position to not only buy a home, including down payment and fees, but to afford its continued upkeep. Then, they should talk with a lending professional about getting a loan pre-approval, which provides a clearer picture of exactly how much house they can afford to purchase. Only then is the time right for them to make one of life’s biggest purchases – and commitments.
Steve Ledford – Loan Officer – Compass Mortgage, LLC