You’ve been looking for a house for the last year or so and haven’t found the perfect one to call home yet. Or maybe you have but the prices are a little rich for you, so you’ve continued your search in the hope that you will find the perfect house at the perfect price. And then the Fed (as in Federal Reserve) throws you a curve.
Yes, interest rates over the last year or so have slowly been creeping up. At first, it was just a little annoyance, after all with rates at around four percent, even if they went up a little, they were still a bargain. Until they reached around five percent, and now they’ve become a concern. Suddenly, your casual search for a home has shifted into overdrive. Who knows where rates are going? You feel like a gambler at the table that maybe stayed too long trying to recoup some early losses.
If you find yourself in that situation, I’d like to offer you a little perspective. Interest rates have been my life for the last 31 years. It’s what I do…it’s who I am.
Back around 1990, I remember refinancing someone’s mortgage DOWN to the unheard of rate of 11.75 percent. Yes, you read that correctly, there’s no need to repeat it. As the decades have passed in my mortgage career, I have seen rates when they were up and rates when they were down. In the well over a thousand loans I have done in all that time, every person finished their loan with an interest rate, one they felt they could live with.
Now let’s face it, rates have been low for a very long time. So low, that if you’re of a certain age you probably don’t remember rates at five percent or above. The new normal has been with us for a long time.
So where does that leave you if you’re shopping for a new home and getting a little nervous that the rug is being pulled out from under you? My answer is simple, it’s time to put things in perspective. Although all of my clients ask about interest rates (and mine are certainly competitive), most of my clients are more interested in someone holding their hand through what can be a complicated process and getting a good deal at the end, both on the house and the mortgage. And that is why most of my clients are referred to me by previous clients or real estate professionals that understand what I bring to the table.
My advice to you if you’re still looking and getting a little antsy is this. Mortgage rates are still a bargain; they were at four percent, they are at five percent and will be at six percent. Stop looking backwards at what could have been. Instead, look forward at the opportunities that will arise as the Amazon type rate shoppers leave the buying market to those who seriously want to buy a home for their family and enjoy it for the next thirty years.
I don’t worry about the rocket type mortgage shoppers who think all there is to financing a home is pressing a button on their cellphone. Those are not my clients. My advice is to find a good local real estate broker that understands what you are looking for. Spend as much time as possible looking at homes. Don’t be too particular about every nook and cranny about each home, and consult with a good home financing professional about your options, so that when the time comes, you will claim your stake in the American dream.
I wish you good luck!