Mortgage rates jumped again. They’re now over 6%, for the first time in 2008. That’s more than double the 2.86% it was this time last year.
But this doesn’t mean you should give up on your dream of homeownership. There are things homebuyers can do to offset the higher interest rates.
Expand Your Search Area and Criteria
If you have been searching for a home in a city or a specific area that is starting to feel out of your price range, you may want to expand your search radius to include more affordable areas.
“Just a few miles farther away from a city can add up to major savings in home prices,” says Joana Iliescu, Sales Associate at ERA Justin Realty, “Plus, chances an up-and-coming neighborhood on the outskirts of town will be the next hot spot in a few years. That will make you money when you sell or create equity.”
You could also take another look at your wish list and narrow things down. “Do you still need a home office?” asks Iliescu, “You may not as more companies are returning to office buildings. Scratching that off your list could make the difference.”
Explore Alternative Financing
Mortgages are not one size fits all. There are a variety of options ranging from different loan types to varying down payment minimums. An experienced loan officer can find the right mortgage for you. “Don’t just choose a loan for yourself online,” says Jennifer Darby Metzger, Broker/Owner of ERA Justin Realty, “Any of our sales agents can personally introduce you to a lender who knows the ins and outs of the business and potentially save you a lot of money in the long run.”
Look for Grants, Gifts & Down Payment Assistance
For many would-be first-time homeowners, coming up with a 20% down payment is daunting. What many don’t know is: You don’t need a full 20%. And the money doesn’t have to come from your own savings.
“There are numerous grants and other options to help first-time homebuyers achieve their dream of home ownership,” says Iliescu. “A good place to check is DownPaymentResource.com. There are special benefits for people in certain professions like veterans, teachers, doctors and nurses. And your personal lender could know of even more that come from local governments and other non-profit organizations.”
If the fear of rising mortgage rates has you pushing pause on home search, it’s time to press play again. Get back in the game and see what you can achieve. Joana Iliescu or any of the agents at ERA Justin Realty can help. Call us at 201-939-7500.