Don’t wait around and fall victim to rising interest rates like many are.

Should you wait for mortgage rates to drop before you purchase a home? They’ve been climbing steadily for about seven weeks, and many people are wary about entering the market as a result. However, there’s a hidden cost that comes with waiting to purchase a home, and today I’ll explain what it is.

For this example, let’s say you have a monthly budget of $2,000. The median home price in the greater Kalamazoo area is $235,000, so for simplicity’s sake, let’s say that you can afford the median home with a monthly payment of $2,000 at current interest rates. As mortgage rates increase, your buying power decreases. That means the maximum home price you can afford goes down.

This is bad news for buyers, and many have understandably decided to just sit out of the market until things change. However, is this a smart move? According to Realtor.com, mortgage rates aren’t going down any time soon. In fact, they’ll likely increase more.

“Now might be the time to sit down with your lender and real estate agent to see what makes sense for you.”

If you’re waiting around for interest rates to drop, you’ll probably be waiting for a very long time. You may decide to just rent until things calm down, but rental rates are also projected to increase. Your monthly payment will still rise, but you’ll be paying for your landlord’s mortgage instead of your own.

This is a complicated issue, but it doesn’t seem like a good idea to wait around for mortgage rates to drop. Now might be the time to sit down with your lender and real estate agent to see what makes sense for you. Email me at sold@veenstrateam.com or call (269) 350-5514 with any questions. I look forward to hearing from you!