What if mortgage rates increase while you’re under contract on a home?
Interest rates have been a hot topic in real estate for much of this year. The Federal Reserve has increased its rates multiple times throughout the year in an attempt to combat inflation, which has many buyers concerned about home affordability. If mortgage rates continue to go up while you’re already under contract as a buyer, do you have any way to protect yourself? Yes, you do have options!
2. Budget for the possibility that rates go up while you’re in escrow. It’s not guaranteed to happen but is possible.
2. Lock in your mortgage rate. Speak with your mortgage lender about locking in your rate as quickly as possible. It may cost a little extra to lock your rate in, but doing so will prevent it from rising. Keep in mind that rate locks can be voided or changed with any alterations to your mortgage application or the loan structure itself.
3. Ask your lender if they have a float-down option. This would allow you to adjust to a lower rate if mortgage rates decrease while you’re under escrow.
If you have any questions about applying for a mortgage or the real estate market in general, don’t hesitate to give me a call or send me an email. I’d love to help you.
