Here’s how to handle rising mortgage rates in today’s market

Mortgage rates are rising. According to a Fortune article, Freddie Mac reported an average fixed mortgage rate of 4.67% at the end of March, compared to 3.11% in December last year.* As a result, buyers house owners should do their due diligence before buying a house.

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Below are the answers to three pressing questions you need to know about soaring mortgage rates:

1. Does rising mortgage rates mean a crash is on the way?

Although soaring mortgage rates are a tactic by the Federal Reserve to try to calm inflation levels near 40-year highs, it is difficult to predict whether there will be a “crash” in the future. Real estate, especially in Phoenix, is booming for more reasons than just low mortgage rates. People moved to Arizona because of the ability to work from home, good weather, and economic growth. Therefore, house prices are unlikely to experience a sharp decline in value. If you wait for an accident to happen before buying a house, it may take a very long time before it happens, if at all.

2. What type of lender should I contact?

There are a variety of lenders to choose from. It is important that you work with a lender who is familiar with loan originations and products of all types. Also, it is very important that your lender or loan officer has access to your own personal needs and goals. Buying a home is probably the biggest investment you will ever make. This is not something to be taken lightly. Here are two places you can go to get a home loan:

Mortgage lenders: These types of lenders will have a range of different loan products. They will use a range of different loan types to ensure your needs and goals are met. These lenders only focus on mortgages and do not sell any other products or services. For example, at Minute Mortgage, we remove unnecessary steps from the loan process and provide a seamless experience for all parties involved (loan officers, agents, and owners).

National depository banks or credit unions: You can go directly to your bank or credit union and apply for a home loan. Banks and credit unions offer a range of products, including home loans.

3. How can I make sure I’m not stuck with a mortgage payment I can’t afford?

Work with your mortgage lender to determine the best mortgage to meet your monthly payment goals. This will help you determine the range of home values ​​or purchase prices you should be looking at. Most mortgages are set up to include property taxes and insurance and a guaranteed time frame in which the debt will be paid off. Setting up the right mortgage with the monthly payment that suits your needs will help you stick to a realistic monthly budget. In addition to your monthly mortgage payment, you will also budget for homeowners association fees and other household and general living expenses. Once you have determined the right mortgage payment and purchase price for a home, it is very important to work with a real estate professional to ensure you get the best possible property for your needs.

Overall, it’s important to do loan research before making an offer on a home. These answers will help you get started on your journey to homeownership!


Author: Brooke Dalzell, Senior Vice President of Mortgage Production at Minute Mortgage, has over 20 years of experience in her industry. She was the first employee of Minute Mortgage and helped create a fully operational mortgage bank from scratch. Dalzell is a multi-state licensed loan officer and manages a team of loan officers across the country. She is a speaker and educates real estate agents and clients on the ins and outs of mortgages.

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