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Adapting to Higher Interest Rates



Interest rates are now sitting around 7.0 percent for a 30 year fixed and some buyers are discouraged and feeling like their dream of homeownership is no longer possible. It's a challenging time with lower inventory, higher prices, and higher interest rates but there are still things you can do to meet your goals.


Here are some tips to help you adapt to the higher interest rates:

1. Shop around for the best rates. Lenders may offer different programs and rates depending on your credit score and history.


2. Improve your credit score to impact your rate. Even if your credit is "good", you can elevate your score with specific, targeted actions. Talk to a consultant who specializes in credit improvement.


3. Adjust your housing budget and explore other neighborhoods to see if they may work. Getting a foot in the door may mean sacrificing your "wish list" but over time, you my have the opportunity to sell and buy up. Long term vision is important!


4. Focus on the monthly payments....what are HOA fees? Real estate taxes? Operational costs? Insurance? Sometimes a higher priced property may cost less to service financially than a lesser priced property.


5. Seek out properties where the asking price may be more negotiable. Everyone's circumstances are different and your agent might be able to get the "inside scoop" on what will motivate the seller.


6. Increase your down payment if you can. Are you getting 7% return on your cash or would the borrowing offset make more sense?


7. Don't try and predict the market. Often buyers lose out because they are waiting for a price reduction or anticipating interest rate changes.


8. Adjust your living budgets: could you cut something from your overall living budget to add more money to service a mortgage? Eating out, daily coffees, online subscriptions can all add up over time.


9. Ask for owner financing. A seller might be willing to carry a loan for tax reasons or just to get their property sold. It never hurts to ask.


10. Take a closer look at fixer-uppers: most pay a huge premium for move-in ready so if you are willing to do the work or can afford to pay for repairs and updates, you might consider this option.


The most important step to home ownership is talking to professionals who will help you with credit, loan programs, and strategies to reach your home ownership goals. Where there is a will, there is a way so don't give up!




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Sotheby's International Realty
3775 Via Nona Marie Suite 100, Carmel CA 93923
831-624-9700

License: DRE#01966114

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Debora Sanders is a real estate salesperson licensed by the state of California affiliated with Sotheby's International Realty. Sotheby's International Realty is a real estate broker licensed by the state of California and abides by equal housing opportunity laws. All material presented herein is intended for informational purposes only. Information is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description. All measurements and square footages are approximate. This is not intended to solicit property already listed. Nothing herein shall be construed as legal, accounting, or other professional advice outside the realm of real estate brokerage.

*All Rights Reserved*

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