NORFOLK, Va. -- Mortgage rates are rising, and it's making the overall home buying process even more difficult.
New data from mortgage giant Freddie Mac shows the average 30-year fixed-rate mortgage rose to 5.22% in the week ending August 11, which is up from 4.99% the week before. When comparing rates from 2021, home buyers will notice rates this year are nearly double.
Now future home buyers are left with even more decisions on their plates.
"You're either going to have to pay more for that house because the loan is going to cost more or you're going to have to downsize the kind of house that you want." says Michelle Singletary, author of What to Do With Your Money When Crisis Hits.
Financial experts say, even with these high prices you still have options when shopping for the best and lowest home loans.
Here are three tips to get you started:
- Strengthen your credit score. The better credit you have, the better rate you’re going to get
- Explore your options. Find out which loan works best for you: Conventional, FHA, VA or USDA
- Shop around. Request loan estimates from several lenders and compare rates.
Loan experts also recommend asking your lender if you can lock in a rate while you shop for a home. If you're skeptical about buying a home right now, some experts say you shouldn’t wait, because the conditions will never really be perfect.
"Date the rate, marry the house... Purchase your home and you know, you're going to have the opportunity, whether it's in six months or a year or a year and a half to what to refinance and lower your interest rate back down," said Frank Fuentes, National Vice President of Multicultural Community Lending, New American Funding.
The good news is you have resources at your disposal. Both Virginia and North Carolina have first-time home buyer assistance programs. Some of those programs combine low-interest-rate mortgages with down payment assistance and closing cost assistance.
