6 Ways Buyers Can Deal with the Rising Interest Rate
You know these 2 things already: The interest rates are rising. But they’re still historically low. Despite the second being very true, the rates are still higher than what you’d expect to get a year ago. But fret not! Here are some of the best ways, you as a buyer can positively deal with this situation: 1. Clean up your credit. Better credit, better rate! Check your credit report and see if there's anything wrong that can be corrected. Ask help from experts to thoroughly check and ask their advice on any changes that would should be made, payments to be paid off or paid down to improve your credit score. 2. Shop around. Do not make the mistake of settling with the first lender you meet. Check with several lenders and see who offers you the best rate. Better yet, ask your trusted agent for their referral. Rule of thumb: if it’s too good to be true, it is! If you have access to a credit union or a smaller local bank that knows you, make sure to check with them—they often have better rates because they lend their own money and / or have a closer relationship with their customers. 3. Buy discount points. “Discount points” are fees you pay upfront in order to get a lower mortgage rate. Buying a point will cost you 1% of your home loan and will generally buy your rate down by a quarter percent, although that can change from one lender another lender. Most lenders will have a cap on how many points you can buy, and may also offer the option of buying lower increments than a full point. If you plan to stay in your house for a long time, this is a great option for you. Identify how much it’ll cost you, and how long it’ll take to break even and then reap the benefits in terms of savings. 4. Lock-in your rate. Since experts agree that rates will continue to rise, look for rate locks. They're typically only offered for up to 60 days, so if you’re serious about buying soon, consider locking in at the current rate. Ask your lender how much a rate lock will cost you and if they offer a “float down” option, which will allow you to get a lower rate than you locked in at, if the rates do happen to come down before you close on your house. 5. Pay biweekly. By paying every two weeks, you will be making an extra payment every year that would help cut your time and interest of your loan. 6. Refinance when rates go down. Be updated with the current market trends or ask your realtor to give you a heads up when rates go down. When they do, refinance your mortgage at a lower rate. Make sure to ask your lender if you have that option when it happens! Hope this help so you can save money and still get that dream house! Share to someone who’s currently buying or planning to buy! If you'd like to be updated with our latest listings, and our curated market update, sign-up to our weekly newsletter here!
What Would it Cost You if You Wait?
Many buyers are losing a lot of money because they WAITED. Yes, you read that right. Buyers today are being priced out of their desired housing market and losing the chance to grab their dream home because it took them months before making a decision. The two biggest factors for this are the increasing mortgage rates and the appreciation of the home prices. Because there’s still a great demand for homes (in San Ramon alone, it’s almost a 100% seller’s market) and the trend is highly unlikely to take a pause anytime soon, prices and mortgage rates will continue to soar. THE COST OF WAITING THIS 2022 Increased Mortgage Rates Last December 2021, the average 30-year mortgage rate was 3.11% which rose to 4.67% by the end of Q1 2022. It increased by 1.56% in the first quarter of this year! The average 30-year fixed mortgage rate hasn’t risen above 5% in over a decade, but it will likely reach this milestone in the second quarter of 2022. Increased Home Prices Over the past three months, which had the lowest inventory on record, home prices increased nearly 10%. Nationally, home prices have hit the $200/sqft ratio, the highest in history! Rising rates, in the short term, boost demand because potential homebuyers want to get ahead of the increase, but in the long term, they reduce demand. Because the market is so undersupplied, less demand is actually a good thing. Home prices simply cannot maintain the rapid increases. Although a housing bubble isn’t likely yet, a sustainable growth rate is better and safer for the long term. Particularly in East Bay, both for single-family homes and condos, prices have increased. In Alameda County, there’s a 23% increase in prices of single-family homes, and 6% increase in condos. In Contra Costa, prices of single-family homes have increased by 6% while condo prices have increased by 13%. The inventory that we have right now in the East Bay is still low but RISING. We do not know how long the increase will be so it’s best to act now while we’re getting more supply than a few months ago. Now that we’re seeing a window for change, it’s the perfect time to act and make a purchase. Your success in buying and selling a home also leans on the strength of your team. If you’re still looking for a competent realtor that you can trust, give us a call at 925-415-0835!
Ep 6: The market's changing!
Is there really a change happening in the market? To what extent? Until when? Watch this episode to find out: Transcript: If you’re out there looking for a home for a long time, getting beat up and the crazy offers have put you on the sidelines, you really don't know where to start anymore, you're frustrated, you’ve given up... …well, there's hope for you. Because the markets are changing and this could be your opportunity to seize that. So if you're gonna ask me if the market's gonna crash I really don't think so. But there is a temporary blip and if I remember it correctly we had the same temporary blip last year in April and May so I'm kind of wondering if this is going to be a pattern every year. But definitely it's here right now and you have the time to seize the moment and get your offers accepted without the craziness. If agents out there are telling you there are 20 offers on a listing, they're talking nonsense. Nobody's getting 20 offers anymore if the property is priced correctly. If it's the right product and it is a desirable product in a desirable city an area, yeah sure, they'll get four to five offers or maybe seven offers. There are certain pockets still in the Bay Area that are getting multiple offers but not every area. So if you are in the market looking for a home for a while, struggled, kind of at the verge of giving up or have given up, give us a call. We'll talk you through it we'll explain to you exactly what's going on in the market. This is not your time to be scared by what you're hearing in the news or what you're seeing in the media. Yes, there are things that are changing right now but when the change is happening most of the time is the time to grab that opportunity. So give me a call at 925-698-1815 and me or one of my team members are here to counsel you and assist you through this process again. ___ Rama has been an agent for almost 2 decades already! If you want to work with someone of integrity, expertise, and great care for her clients, call her at 925-415-0835!
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