Current Mortgage Rates: Richmond, VA
3.750% (3.751% APR) 30yrs
3.250% (3.282% APR) 15yrs
as of 08/22/19
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Tips for Buying a Home When Mortgage Rates are Rising

Tips for Buying a Home When Mortgage Rates are Rising

Mortgage rates have risen about .5% since the end of 2017 to 4.625% for a 30-year conventional loan. If you are planning to buy a home this year, it’s important to learn what this could mean for you.

The mortgage rate increase will have an affect on your monthly payment. It may not be a large amount each month, but the cost increase will add up over time. However, this has happened steadily over the past decade, and it doesn’t mean that this is a bad time to buy a home.

Here are a few things that you can do when mortgage rates rise:

Lock your mortgage rate
Speak with your lender about locking your mortgage rate. This means that your interest rate will be frozen until your closing, ensuring that you will not pay more in interest than the rate you were quoted at the time you sought pre-approval. This can be helpful if month-to-month interest rates seem variable.

Consider increasing your down payment
Even if interest rates are rising, the lowest rate available is always going to go to an ideal homebuyer. If you can increase your down payment, you will have a better chance of getting a lower interest rate.

Consider your price range closely
When interest rates increase, the housing market can slow. This often means that houses on the market may be open to selling at a lower price range. If this is not the case, consider reevaluating your price range now that interest rates have changed.

Pay down your ARM mortgage
If you have an ARM (adjustable rate mortgage) and the rate is going to change soon, you will likely pay more per month due to the increase. If you can pay more at this time, you can decrease your total amount owed prior to the increase in interest.

Buy discount points
Most lenders will allow you to pay more money in loan costs with the specific goal of reaching a lower interest rate, called buying discount points. The amount paid is determined by the loan amount, and will lower your rate by .125% increments. The larger the rate decrease, the larger the amount of discount points.

Don’t panic. Mortgage rates have fluctuated up and down for many years. Monitoring interest rates has always been a part of buying a home, but it should not dissuade you from making a purchase when you are ready for it.

Contact RatePro Mortgage for the current rate trends and to learn the best time to lock in your interest rate on a mortgage.

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