Mortgage rates have been steadily falling since mid-summer. They now average close to 6 percent, even before a much anticipated Federal Reserve meeting on interest rates on September 16.
Mortgage rates are a major consideration when buying a home. They have everything to do with the overall cost of borrowing money, as well as your monthly payments.
Below are some home loan tips that can aid you in your decision to purchase property in Winston-Salem. Keep reading to discover how a mortgage rate comparison can help you save money and secure a home.
Consider Competition
Lower mortgage interest rates can give prospective homebuyers more purchasing power. However, they also almost always lead to greater competition in any given market. This is especially true immediately following a period of higher rates.
For instance, when the Fed started hiking rates to combat inflation, home sales gradually declined. Since the slight downturn in rates this summer, home sales have already begun to increase--and so have prices.
This is something to think about when buying. Waiting for interest rates to get even lower could be negated by rising home prices.
Explore Both Fixed and Variable Rates
One of the biggest decisions to make when securing a mortgage is between fixed vs variable rates. As the name suggests, a fixed rate is the same throughout the entire loan term. Variable mortgage rates can fluctuate over time based on changes in the broader market.
There is no danger of fixed-rate mortgages going up over the course of the loan. This can be a huge advantage for long-term planning and stability. The downside is that you pay for that security, as fixed rates are almost always higher than variable rates.
With variable rates, you run the risk of paying more. However, you will almost certainly get a lower rate and, in a market where they are falling, you could save lots of money. Consider factors like the term of your mortgage and your comfort with risk before deciding on one.
Assess Personal Finances
A final consideration when considering buying property in Winston-Salem is to take a hard look at your personal financing. Do you have a substantial amount of existing debt, including student loans, credit cards, or car notes? While this may not stop you from buying a house, it could significantly impact your loan amount and rates.
Do you have an emergency fund for living expenses? This is especially important if the new property needs major improvements or repairs.
Do you have enough to make a strong down payment? Not putting 20 percent down may not prohibit you from buying, but you need to get expert advice regarding your options. In most cases, you will need to either take out a second mortgage or pay for private mortgage insurance until this threshold is met.
Learn More About Winston-Salem Mortgage Rates
Falling mortgage rates, while generally considered a good thing for potential home buyers, can produce other complications. One of the best things you can do is seek professional advice for making the right decision based on your unique circumstances.
PMI of the Triad provides comprehensive management for residential and association properties. We provide a range of services, including real estate acquisition advice. Contact us today to schedule a free consultation to discuss the best home loans available.
