Mortgage rates soared to 4.61% this week catching Boston homebuyers
and refinancers by surprise. With interest rates at their highest point in two
years, many would-be buyers are concerned that their chances at owning a slice
of the American dream have gone out the window. Comparatively, those who were
in the process of refinancing their mortgages are now wondering if it’s worth
the time or trouble to follow through. So, what is a homebuyer to do in this
type of situation? There are a few options to explore that I would like to advise
buyers to look into before pulling the plug on their Boston home search.
Choose an Adjustable
Rate Mortgage
Boston homebuyers who were expecting to pay close to 3.5% on a
30-year fixed mortgage were surprised and discouraged to learn their monthly
payments would be considerably pricier than they anticipated. Because of this,
many have opted for a 10-year ARM to keep their payments closer to their
expectations.
Ask your lender about
a float-down option
Not all lenders offer a float-down option, but it’s worth
inquiring about. With a float-down, the borrower has a right to have his or her
mortgage rate reduced if rates happen to fall. This option can be attached to
any type of loan, and the terms are at the discretion of each individual lender.
Wait for the market
to calm
As always, Boston homebuyers have the option to wait it out for a
week or so and see where mortgage rates go from here. There’s a chance they may
drop slightly, but there’s no guarantee. If they appear to hold steady, it
might be a good idea to lock in now rather than risk falling victim to another
increase down the road.
While the hike in the 30-year fixed mortgage rate has
affected affordability for some Boston homebuyers, home prices are still below historical
peaks. According to an article by USA Today, “At today's house prices and income levels,
mortgage rates would have to be nearly 7% before the U.S. median-priced home
would be unaffordable to a family making the median income in most parts of the
country.” With that said, I also understand that there are some hopeful
homebuyers that were pushed beyond their limits of what they can afford as a
result of the mortgage rate increase. The good news is that your dream of
homeownership is still attainable!
If you’re planning to buy a home in Boston, please contact me. I’d be happy to go over all of your options with you and recommend a lender or two. Despite this hiccup in your plans, the important thing to remember is that both home prices and mortgage rates are still quite low by historical standards. With a Boston real estate agent by your side, you can rest assured you’ll be empowered to make informed decisions throughout the entire home buying process. I look forward to assisting you in your journey!
If you’re planning to buy a home in Boston, please contact me. I’d be happy to go over all of your options with you and recommend a lender or two. Despite this hiccup in your plans, the important thing to remember is that both home prices and mortgage rates are still quite low by historical standards. With a Boston real estate agent by your side, you can rest assured you’ll be empowered to make informed decisions throughout the entire home buying process. I look forward to assisting you in your journey!
Lucas
Garofalo
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