From 2019’s low lows to 2022 high highs, mortgage rates have been bouncing around for the last couple of years, and this year is no different. With the first quarter of 2023 playing between 6.6-6.125%, there’s no telling where the next quarter will take us. Even with forecasts predicting a further retreat in this year’s mortgage rates, nothing is guaranteed as the housing market remains at the mercy of the Fed, the global economy, bond markets, and employment patterns, among other influential factors.
How To Cope With The Fluctuating Mortgage Rates
While these are inarguably trying times to buy or sell property, financial analysts and mortgage experts see a silver lining. According to the experts, hovering mortgage rates are potent when you know where to look- you can maneuver these shifty rates and have them play in your favor. How so? Read on to find out.
1. Eyes On The Rates
This should be standard practice for both homebuyers and sellers. With mortgage rates constantly switching, keeping a steady eye on the trends becomes crucial. You want to stay updated on all the rate updates and important housing market news if you’re going to make the most out of your purchase or sale. When the rates shoot up, please take it as a cue to wait on your purchase or hasten your listing, depending on which side of the spectrum you’re on.
2. Know When To Lock In
Understanding the best time to lock in your rate is the real game-changer, especially for buyers. Ideally, this will always be when the rates are more lenient on your pockets with no expectations of a further retreat. Signing up to have your rates fixed at such a time can be a steal saving you thousands of dollars in the long run.
Pro Tip: Use this tip when scouting for the best lender or listing on the market to maximize those savings.
3. Learn The Ropes
To play the game, you’d have to learn the game. What do we mean? You must understand how it all works to better keep up with mortgage rates. Take the time to learn how mortgage rates have changed over the years and the driving forces behind them. Once you have this figured out, align your needs with those factors to favor your next move. Take this practice up a notch by grasping real estate jargon and clauses.
4. Consider Refinancing
You can always choose to refinance your mortgage when rates begin to fluctuate. With the economy slowing and inflations rising, meeting your termed payments can be challenging so mortgage refinancing can be handy. Consider negotiating with lenders for lower rates and charges to cope with intense rate hikes this season for significant savings and reduced financial weight.
5. Bump The Payments
Take advantage of mortgage rate declines by bumping up those monthly payments on your ARM. This move will shave off some months on your mortgage and guarantee you lower costs, saving you hundreds, if not thousands, of dollars. Clearing your mortgage (or at least most of it) during a decline will also cushion you for rainy days as it will for the times when rates are soaring.
Wrapping Up
Mortgage rates are flaky thanks to the various factors influencing the economy, and while most of these factors are out of our control, they’re still malleable to our advantage. Depending on which end of the housing market spectrum you’re in, mortgage rate declines and inflation can be beneficial when you know how to work your way around them. With these five tips, anyone can stay on top of mortgage rate trends and get the most out of their sale or purchase.