an increasing trend with dollar background, real estate lawyerMortgage interest rates are expected to rise with the improving economy, but home buyers have options to protect themselves from increasing costs. As of March 1, the rate for a thirty-year fixed mortgage had risen to 4.43%. Rising interest rates can cost home buyers thousands of dollars in increased mortgage payments. A real estate lawyer may be able to help home buyers understand the local housing market and determine if it is appropriate to purchase a home before interest rates climb higher.

Valuable Information

Mortgage interest rates are at their highest point since 2014. Expectations are that the Federal Reserve will raise interest rates twice more in 2018 and will continue to do so in the future. The knowledge that interest rates are going to increase can help buyers make educated decisions about real estate purchases.

What Can Home Buyers Do About Rising Mortgage Rates

Buyers have no control over whether the Federal Reserve will raise rates or the timing of the increases. They do have control over their personal decisions and actions, including what they spend on a home. If a home purchase is in their plans, there are three things buyers should be doing now:

  1. Learn the Housing Market – Housing markets vary in the Chicago area, but a knowledgeable agent or real estate lawyer can offer advice about the best areas and home pricing to meet the buyer’s needs
  2. Identify a Home to Purchase – With an understanding of the Chicago market, buyers should identify a specific home to purchase
  3. Lock in a purchase price – Whether interests rates increase now or in the future, the price of homes is rising continually, making it critical to lock in a purchase price once the right home is identified.

While interest rates fluctuate over time, price is a fixed quantity. A mortgage can always be refinanced at a lower future rate, but the purchase price cannot be lowered once the sale is final. Putting off the decision to buy a home in the hope that interest rates will drop while prices are going up can be costly. Wise home buyers are considering their options and making a plan now.