4 Ways to Deal with High Mortgage Rates

4 Ways to Deal with High Mortgage Rates

This article will discuss how to tackle the current high mortgage rates and provide four practical methods to help you succeed in this challenging market.

High mortgage rates are a crucial topic in today’s real estate market, impacting buyers, sellers, investors, and all participants in the real estate sector. In this article, we will explore how to deal with a 7% high mortgage rate and offer four strategies to help you thrive in this challenging market.

4 Ways to Deal with High Mortgage Rates

  1. Avoid Predicting Mortgage Rate Fluctuations

Attempting to time your home purchase based on economic forecasts can be stressful and often unrealistic. According to Jenny Schuetz, a senior researcher at the Brookings Institution, buying or selling a home is different from trading stocks; it’s a medium to long-term investment where timing cannot be precisely determined. She suggests that for most people, the right time to buy depends on individual circumstances, such as relocating to another city for a new job, getting married, having children, or receiving a raise.

  1. Lower Your Expectations

Higher interest rates mean that your housing budget won’t stretch as far, so potential buyers may need to adjust their expectations. Aniva Hinduja, the General Manager of Housing and Mortgages at Credit Karma, advises that for those who decide to buy immediately, maintaining flexibility and being willing to compromise can be helpful, such as giving up a third bathroom or purchasing outside your preferred location. Financial advisor Brian Seay in Huntsville, Alabama, states, “Your house doesn’t have to be your ‘forever home.'”

  1. Focus on Monthly Mortgage Payments

Ensure that your monthly payments do not exceed your overall budget. Francisco Ayala, a financial planner in Phoenix, suggests looking at what other areas in your budget can be trimmed to give yourself some breathing room, whether it’s cutting back on dining out or buying new clothes.

  1. Secure the Most Favorable Mortgage Rate Possible

Emily Irwin, Senior Advisory Director at JPMorgan Chase, recommends starting with your primary financial institution and inquiring about any discounts based on your relationship or potential eligibility for discounts. She suggests that if transferring assets to a new bank means you can secure a lower mortgage rate (possibly lower by 0.25% to 1%), it might be worth considering. Additionally, she advises consulting your real estate agent for any recommendations regarding competitive mortgage rates.