NORFOLK, Virginia – Mortgage rates are rising, making the process of buying a home even more difficult.
New data from mortgage giant Freddie Mac shows the average 30-year fixed-rate mortgage rose to 5.22% in the week ending August 11, from 4.99% the previous week. When comparing 2021 rates, homebuyers will notice that this year’s rates are almost double.
Now, future home buyers find themselves with even more decisions on their plates.
“Either you’re going to have to pay more for this house because the loan is going to cost more, or you’re going to have to downsize the type of house you want. says Michelle Singletary, author of What to do with your money in a crisis.
Financial experts say that even with these high prices, you still have options when shopping for the best and lowest home loans.
Here are three tips to get you started:
- Strengthen your credit score. The better credit you have, the better rate you’ll get
- Explore your options. Find out which loan is best for you: Conventional, FHA, VA or USDA
- Compare the prices. Ask for loan estimates from several lenders and compare rates.
Lending experts also recommend asking your lender if you can lock in a rate while you shop for a home. If you’re skeptical about buying a home right now, some experts say you shouldn’t wait because the conditions will never be truly perfect.
“Date the rate, marry the house… Buy your house and you know, you’re going to have the opportunity, whether it’s in six months or a year or a year and a half to refinance and lower your interest rate towards down,” said Frank Fuentes, national vice president of Multicultural Community Lending, New American Funding.
The good news is that you have resources at your disposal. Both Virginia and North Carolina have first-time homebuyer assistance programs. Some of these programs combine low-interest mortgages with down payment assistance and closing cost assistance.