Rising mortgage rates have defined the 2022 housing market. With increasing rates, purchasing a home has become more costly.
“Compared to one year ago, the monthly mortgage payment rose to $1,944 from $1,265, an increase of 53.7%” (National Association of Realtors).
Is this causing you to put your home-buying plans on hold? You may want to reconsider. The good news is you can navigate today’s housing market and this rising rate environment with a few simple tips.
Get Pre-Approved for a Mortgage & Determine Your Budget
Getting pre-approved for a mortgage is one of the most critical steps to take when buying a home. This will give you an idea of how much money you can borrow and what interest rate you will be paying. What monthly payment can you comfortably afford? This is an important question to answer.
Mortgage calculators help you determine your budget. Enter your desired monthly payment, down payment, and interest rate, and it will calculate how much home you can afford.
Remember that your monthly budget should also include property taxes, homeowners insurance, and maintenance costs. These are often overlooked when determining how much house you can afford.
Look for Homes That Are Within Your Budget & Expand Your Search Area and Criteria
There’s no use looking at homes out of your price range. Not only will this cause frustration, but you may end up making an offer on a home that’s not affordable.
To avoid this, only look at homes within your budget, and if you’re having trouble finding a home that meets your needs, try expanding your search area or criteria.
Expanding your search location or re-prioritizing the items on your wish list can open up opportunities you haven’t considered, which could help you afford more of what you need (and want) in a home. As CNET notes:
“Area growth is likely to keep pace with the market, which means that the outskirts of town might be hopping within five years. Consider stepping out of your ideal location by searching in the nearby cities. You may find better prices and more square footage.”
Look for Grants, Gift Funds, and Down Payment Assistance
There are also many options available regarding securing the funding you need to purchase a home. One valuable resource to explore is downpaymentresource.com. As NAR indicates:
“Many local governments and non-profit organizations offer down-payment assistance grants and loans, targeted to area borrowers and often with specific borrower requirements.”
Work with a Local, Experienced Realtor
When you work with a local, experienced realtor, they will be able to help you navigate today’s housing market. They will have a pulse on the local market and can help you find homes that meet your needs and budget.
A good realtor will also be able to negotiate on your behalf and help you through the home buying process from start to finish. If you’re looking to buy a home in today’s housing market, following these tips will help you navigate the current landscape and find the right home for you.