The National Association of Realtors expects average rates for 30-year fixed mortgages to increase to 4.7% to 5% by year end. But before you run to the realtor, here are 3 more-important questions to ask yourself.
1. Can I afford to buy a home?
Buying a home is a big commitment. Before trying to take advantage of low interest rates, you should be confident you can afford a home. Take a step back to figure out if you have enough savings and income for a down payment, taxes, fees and monthly payments.
2. What does my credit look like?
Credit health plays a huge role in the mortgage approval process. If your credit score isn’t where it needs to be, time may be on your side. Taking a little time to improve your credit health — paying off debt, paying bills on time, and other smart steps — can lead to mortgage approval or better rates than you might get by rushing to buy now.
3. What’s my time horizon?
Like weather changes, mortgage rate fluctuations can be frequent and unpredictable. Plus, rates are expected to rise gradually. So if you’re not quite ready to buy, there’s little harm in waiting. Don’t let the prospect of a slightly higher rate rush you into a decision you may later regret.
Advertiser Disclosure: TransUnion Interactive may have a financial relationship with one or more of the institutions whose advertisements are being displayed on this site. In the event you enter into a product or service relationship with any such institution through the links provided on the site, TransUnion Interactive may be compensated by such institution. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TransUnion Interactive does not include all credit card companies or all available credit card offers.
What You Need to Know:
There are various types of credit scores, and lenders use a variety of different types of credit scores to make lending decisions. The credit score you receive is based on the VantageScore 3.0 model and may not be the credit score model used by your lender.
*Subscription price is $24.95 per month (plus tax where applicable).