Mortgage rates are a factor that can have a huge impact on the cost of buying a home. If you can buy when rates are relatively low, you can save tens of thousands of dollars over the lifetime of your mortgage.
Many homebuyers try to time their home purchases to seize lower rates when they are available. This can be a challenge, as you need to be able to predict how rates will rise and fall. Below are a few tips to help you.
- Understand the factors that drive mortgage rates. Bond yields, inflation, the price of borrowing, and market sentiment are examples of factors that can move mortgage rates. The better your understanding of these factors and the effects they can have, the more likely you are to be able to effectively time a home purchase.
- Keep up with financial news. There is no way for you to keep track of the factors that push mortgage rates up and down without monitoring financial news and economic calendars. Do so diligently.
- Follow along with your mortgage company’s news and commentary. Some mortgage companies employ experts in predicting what mortgage rates are likely to do. They may share some of their insights in the form of blog posts, videos, and other commentary. Of course, not all mortgage companies are equally adept at understanding and interpreting economic data. But those that are may be able to help you figure out when the ideal time would be to submit your mortgage application.
- Consider buying now if the timing is right in all other respects. It is important to understand that even economic experts sometimes struggle to correctly interpret economic information and make accurate predictions about the future. Indeed, clashes between expectations and reality often drive market sentiment, and ultimately, mortgage rates. For that reason, it is not always worth it to keep trying to time your purchase. As you wait for rates to drop further, they could end up rising, and you could end up missing your best windows of opportunity. Meanwhile, months go by, and you still do not own your new home.
Every month that goes by without making your purchase is one in which you do not build equity, or benefit from your home rising in value. So, if you are ready in all other ways to buy a home, you may want to just pull the trigger.
Buy a Home in Virginia
If you are ready to buy a home, First Residential Mortgage is here to walk you through the application process. We can also give you recommendations for how you can improve your credit and choose a type of home loan that can help you qualify for competitive rates. To get started, please give us a call at (540) 838-5868 to schedule your mortgage consultation. We are based in Blacksburg, and can help you buy a home or refinance in the surrounding area, or anywhere in VA.
