In an ideal world you would be able to wait until mortgage interest rates reach the all time record low of 3.35% from earlier this May to purchase your new home. However, rates have been steadily climbing since then and don’t show any signs of dropping. For most of us life happens and deciding to purchase a house depends more on our personal circumstances at the time than it does on mortgage interest rates. A home purchase is based on how we want to live and raise our families. What type of home and if a buyer can afford to buy at all depends largely on the real estate market and interest rates at the time of his or her decision. When interest rates 10 years ago were averaging 5.3% many people in the lower middle income bracket did not qualify for a mortgage at that rate. But now more people are able to enter the housing market due to much lower interest rates.
If mortgage interest rates are low at the time home buyers are ready to purchase a home than they will be able to either enter the housing market or they will be able to afford a bigger, better home than they would at a higher interest rate. For some buyers who may be at the bottom end of the qualifying point an even slight increase in the interest rate would mean they can’t afford a house at all.
However, right now in general is a great time to buy. The average rate for a 30 year-fixed mortgage was 4.51% in July and shows that interest rates are stabilizing with the rate decreasing just slightly to 4.4% in early August. To ensure you take advantage of lower interest rates before they begin to climb get a pre-approved mortgage loan. It will better prepare you when house shopping because you will know what you can afford to buy. You will also avoid the disappointment of finding a house you love only to discover you can’t afford it.
What mortgage rates are going to do from one day to the next is anybody’s best guess. The best way to prepare yourself is to watch the market and jump in at a rate you can afford and then lock it in with a pre-approved mortgage loan. Happy house hunting.
Aurora, a leading financial services company, has funded billions of dollars in loans across the United States and serves clients nationwide in more than 18 states and jurisdictions. A Direct DE FHA Lender, Aurora provides a broad range of financial products and services, including consumer banking and credit, corporate and investment banking. For more information on Aurora Financial, visit www.auroraf.com or call 1-(877) 887-1117.