After months of planning, you’re finally ready to put the ball in motion and start building. Or at least you were… until today’s challenging interest rates made you think twice.
Here’s the thing about mortgage rates, though – they change. And while they may not drop tomorrow, there are still ways to navigate the high rates so you can build your dream house, right on schedule.
Instead of longing for the good old days of 2021, when the interest rates settled briefly at a record low at 2.65%, use a little creativity, ingenuity, and patience while you stick to your plan.
As longtime builders in Cincinnati, we’re no strangers to fluctuating markets. Here’s our tips on how to afford a custom home when the interest rates are high.
Talk to several mortgage professionals
First, remember what works for one person might not work for you. We’ve all got different budgets, timelines, and goals. There are numerous great mortgage companies in Cincinnati, and we recommend talking to at least a few (aim for up to four) before choosing a lender.
Explore several types of loans
With so many loan options available, it’s best to consider all of them before making a choice. Shorter-term, 15-year loans come with lower interest rates. Additionally, adjustable interest rates may be lower than fixed rates (although these are best for those who plan to stay in their home for a few years).
Here’s where a trusted, experienced mortgage professional can come in. Talk over all your options with them to find the loan that’s right for you.
Build now, refinance later
Again, interest rates change and most economists believe that rates will either drop or moderate by the end of 2023.
Here’s what Danielle Hale, chief economist at Realtor.com says, “Eventually, as it becomes clear that the economy is on a stable path and inflation has retrenched, we expect to see mortgage rates trend lower. This could already be underway and may continue into October.”
In fact, buying when the interest rates are high can come with a silver lining. Your home may be worth more by the end of next year. When the interest rates are lower, the value of your home will go up. So, buying now could be a way of saving money (or making money) in the long run.
Make a larger down payment
If you can, try to make a larger down payment to offset your total loan balance and get a better insurance rate. You might also be able to get a lower interest rate by making a large down payment.
Sure, this might mean pausing on some luxury finish touches on your new custom home. But it’s only temporary. We promise your new home will still be a work of art, even if it means pausing on that painting you’ve been hoping to buy.
Don’t let today’s mortgage rates put your dream on hold. Instead, let the team at Classic Living Homes help you start planning for your future, today.