When thinking about buying or selling a home, mortgage rates are a key factor to keep in mind. As most are aware, the COVID pandemic resulted in historically low interest rates, helping in part to fuel our flaming-hot real estate market. The Federal Reserve has certainly indicated rate hikes are imminent in 2022 and indeed we have seen rising mortgage rates already—primary incited by the continued fall in the unemployment rate, raging inflation, and the 10-Year Treasury Yield. In fact just a few weeks ago the Freddie Mac 30-year fixed mortgage rate nearly reached 4% for the first time in as many years.

However, due to recent global uncertainty and current geopolitical tensions, the upward trend is now being impacted and rates are once again in decline. This is a small break for buyers who are already challenged in a strong seller’s market.

Here are some TIPS for BUYERS dealing with rising mortgage rates:

• Be a Savvy Shopper. It is wise to compare packages offered by at least three different lending institutions, among which rates and closing costs can vary greatly. Borrowers may be able to save thousands of dollars over the life of the loan, for instance, just by taking the time to research multiple lending options.
• Maintain a Strong Credit Score. Surprisingly enough, buyer’s credit scores are the single most important factor in determining mortgage terms and interest rates. Try to maintain low balances on credit cards and pay your bills on time.
• Pay for Points. Mortgage points, also known as discount points, are fees a homebuyer pays directly to the lender in exchange for a reduced interest rate. This tactic is often referred to as “buying down the rate.” Essentially, partial interest is paid up front in exchange for a lower interest rate over the life of your loan.
• Avoid Adjustable-Rate Mortgages. The risk of higher rates in the future looms dark on the horizon and no homeowner wants to lose the ability to afford their house payment down the road.