If there is one thing that we know for sure when it comes to the economy this next year, it is that nothing is certain! With the cost of living on the rise, interest rates going up, and other economic factors at play, it is fair to assume that the beginning of this year might see a slowdown in the market that we haven’t witnessed in years.
Although to some it might seem like a good time to wait on the sidelines to see what happens, others might miss out by doing so. Sure, interest rates are high, but when you compare them to other times in history, they are still considered low. So what is your best option for the year ahead? These are things to consider when deciding whether it is best to stay put or move along.
Interest Rates are “High”
If you are considering holding off because interest rates are too high, then you are probably someone who just came on the scene as a homeowner. In the 80s, 20+% mortgage rates were not unheard of; they were the going rate. Yes, 2 percent was ideal, but that might never happen again, and waiting for it might keep you throwing away money on rent for the next decade or more.
It is All Relative
As hard as it is to accept financially, everything truly is relative. Sure, you might pay more for your home interest-wise, but you also won’t be paying nearly as much as someone did a decade ago. Also, if you sit it out to see what prices do, you might either price yourself out of the market or miss the opportunity to buy when you had a chance. What seems high today is relatively low when you look at where things were just five years ago.
Rental Rates Will Climb Too
If interest rates continue to be high or go higher, then it might seem like you are going to be paying a ton on your mortgage. But with mortgage rates on the rise, rental rates will be highly competitive, which means that you will probably pay more in rent. In the end, if you are renting and overpaying, then you have nothing to show for your rental income when you are done, whether that is in two years or twenty. Think of it this way: if the interest rates go down in the next couple of years, you can always refinance; and you will have saved rent payments along the way that went to pay your mortgage off in the interim.
Mortgage Lenders Aren’t All the Same
Many potential homeowners assume that finding a mortgage isn’t possible when it actually is. Not everyone fits into a traditional mortgage scenario, which is why we offer many different types of mortgage loan payments and plans. If you want to ride out the time and not fully commit, you can consider things like an interest-only loan. That way, you can wait until the economic fog clears to see if there is a more concise resolution for your mortgage and homeowner woes.
As we head into the new year, many are wondering whether now is the time to find mortgage lenders in South Carolina, or if waiting out the time by renting is a wiser choice. Although we don’t have a crystal ball, we can look at the past to predict the future; when you do that, buying right now is the smartest way to go. Contact HomeSpring Mortgage today to discuss how we can have you in a new home this year!