The State of Mortgage Rates in 2017
If you’re planning on buying a house in 2017, then you’ve probably been following talk of mortgage rate hikes. The fact is, interest rates began rising last October, with sharper increases after the election due to anticipated market reactions. However, even with recent mortgage rate increases, the market remains to be a promising home buying environment, making now an ideal time to buy.
Not convinced? In the 1960s, the average federal interest rate was around 6%. Currently, rates are hovering in the low 4% range, which remains near the all-time low. With average property values at similar lows, the case can be made that it’s cheaper to own a home than rent.
Of course, mortgage interest hikes still have a significant impact on homebuyers’ financial plans. While there is little negotiation room on the rate itself, prospective borrowers can improve their chances of qualifying for lower interest rates in the following ways:
- Maintain a high credit score. The higher your credit score, the lower your interest rate will be. If your score isn’t where you want it to be, then you’ll want to take the steps required to boost it before you begin the home buying process.
- Consolidate debt. How borrowers use their revolving credit is very important. Any debt can pull your credit score down drastically. Before beginning the mortgage process, borrowers should take the necessary steps to consolidate, and pay down, outstanding balances. Consult with a mortgage lender to see if your debts could impact your goal of buying a home in 2017.
- Make a larger down payment. Your income determines the type of house and mortgage you’re able to obtain, but if you have enough money saved to make a larger down payment, it can radically reduce the interest rate.
- Look into an FHA loan. If you don’t want to invest in a larger down payment or have a lower-than-desired credit score, consider looking into FHA loan options, as they tend to be more forgiving and subject to lower rates.
If you’re hoping to buy a house and looking to score the best interest rate possible, send us a message. We’d be happy to put you in touch with an experienced member of our lending team who can help you evaluate your options.