Whether this is your first home or you are an experienced buyer, mortgage rate increases have given way to an alarmingly volatile atmosphere within the housing market. If you are in the process of buying property, it is important you know what steps to take when mortgage rates increase while in the middle of a real estate transaction.
Attorney Daryl L. Jones of The Law Offices of Daryl L. Jones, P.A is a top-rated real estate attorney with over 30 years experience assisting clients with every process involved in real estate transactions. Many buyers have opted to drop out of the market in hopes that mortgage rates will level out in the coming months. For buyers like you who have decided to forge ahead with plans to purchase property, here are a few steps to help you cope with rising mortgage rates.
Seven Steps for a Buyer to Adapt to Rising Mortgage Rates in Florida
If you are in the process of buying property in Florida, ever increasing mortgage rates may have you concerned about today’s housing market. To help you adapt to rising mortgage rates during the buying process, follow these steps:
Shop Around for Loans
You should consider multiple lenders to find the best rate for the loan program that will work best for you.
Increase Your Down Payment
If you have the resources, placing a larger down payment will help decrease the amount of your mortgage loan. As a result, this will also reduce the amount in interest you will pay, and in turn, reduce your monthly mortgage payment.
Ask Family for Help
Whether you ask for a loan or a family member gives you money as a gift for a downpayment, this may be one way to help reduce the amount you need to borrow for a mortgage loan.
Consider an Adjustable-Rate Mortgage
An adjustable-rate mortgage, or ARM, is an option many buyers are considering because this type of mortgage has a lower interest rate for the initial fixed period. However, you should proceed with caution. Should ARM payments increase above your ability to pay, you must have an exit strategy to refinance or to pay off this loan, or risk losing your home to foreclosure.
Shop for a Home That Has Been on the Market for a Long Period
For homes that have been on the housing market for three weeks or longer, buyers may be able to purchase the home for less and borrow less as a result.
Consider the Location of the Property
Consider purchasing property in a location with lower property taxes and lower homeowner association dues. This will help offset the higher monthly payment that comes with a higher interest rate.
Lock in a Mortgage Rate While You Are Still Shopping
As long as you ratify a contract within 30 to 45 days of your loan approval date, some lenders offer to lock in a mortgage rate before a contract has been signed by both parties. This will prevent you from having to pay a higher mortgage rate just because you waited longer to decide to purchase a property.
Get Help From a South Florida Real Estate Lawyer
Rising mortgage rates can make it stressful for buyers as they try to get the best and most cost effective deal for their new property. To get help adapting to the current housing market climate, contact a South Florida real estate lawyer as soon as possible.
Daryl L. Jones of The Law Offices of Daryl L. Jones, P.A is a former state senator, retired air force colonel, and practicing lawyer in Florida for over 30 years. To retain the help of a top-rated attorney and get excellent advice concerning your real estate legal needs, schedule a free initial strategy session by calling 786-876-9604, or contact us here.