Navigating Home Loans When Mortgage Rates Are Rising

NORFOLK, Virginia – Mortgage rates are rising and that’s making the whole home buying process even more difficult.

New data from mortgage giant Freddie Mac shows that the average 30-year fixed-rate mortgage rose to 5.22% in the week ended August 11, up from 4.99% the week before. Comparing prices from 2021 onward, home buyers will find prices nearly doubling this year.

Now future homebuyers have even more choices to make.

“You either have to pay more for that house because the loan is going to cost more, or you have to downsize the kind of house you want,” says Michelle Singletary, author of What to Do With Your Money When Crisis Hits.

Financial experts say that even with these high prices, you still have options when looking for the best and lowest home loans.

Here are three tips to get you started:

  1. Strengthen your creditworthiness. The better the credit, the better the rate you will get
  2. Discover your possibilities. Find out which loan is best for you: Conventional, FHA, VA, or USDA
  3. Shopping spree. Request credit estimates from multiple lenders and compare rates.

Credit experts also recommend asking your lender if you can set an interest rate while you’re looking for a home. If you’re currently skeptical about buying a home, some experts say you shouldn’t wait because conditions will never be truly perfect.

“Date the interest 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, which you can refinance and lower your interest rate back,” Frank said Fuentes, National Vice President of Multicultural Community Lending, New American Funding.

The good news is that resources are available to you. Both Virginia and North Carolina have assistance programs for first-time home buyers. Some of these programs combine low-interest mortgages with down payment help and closing cost help.

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