While managing a Real Estate office I watched one of our agents work with some clients who wanted to buy a house and had gotten their pre-approval for a loan. The realtor's assumption was this couple, with that approval, were actually ready to make the purchase. His clients continued to look for a house but unfortunately were taking longer than what the agent thought they would take. The clients were first time home buyers, purchasing an entry level house, which was really all that they could afford and in fact, barely qualified for the mortgage. Here is the kicker and something to always remember.
This couple failed to get locked in on an interest rate. Interest rates went up which resulted in a higher monthly payment. They no longer qualified for a house in the price range they had really planned to buy because the additional interest would put them over the top of their pre-approved dollar figure. They were forced to look for something less than what they wanted. In their case they were nearly priced right out of the housing market.
It is a simple truth to remember: Every time interest rates go up, some people that would have been able to purchase a home will no longer be qualified, while others will learn they will qualify for less of a house than what they had anticipated before hand and actually believed they could afford. Why? The answer is simple: Perhaps someone is approved for a payment of $2,000 per month. Interest rates rise resulting in a payment of $2195 per month for the same amount of the loan planned on by the borrower just days or weeks before. If the individual buying the house was only eligible for a payment of $2,000, then they will now have to look for something that costs less because the total amount of money they can secure for $2,000 per month just went down.
I would never suggest to anyone that this is the time for you to buy because only you, as a prospective buyer, can determine the best time. On the other hand, interest rates are still quite low, we are still in a buyers market and the present inventory, at this writing, is giving us a wonderful selection of homes to choose from.
David L. Burrows, Realtor®
Envirian of Warrenton, Warrenton, VA 20186
Phone: (888) 673-7866 x119
Credit Tip: Always secure your Mortgage Pre-Approval before going out house shopping. Talk with your Loan Officer to determine if he/she believes you should lock in the rate.
Seller Guidance: I would encourage you to employ a Realtor to help you sell your home. When your agent or another agent is showing your house, go away and let them do your work for you. I also urge you to utilize my FREE SELLERS TOOLKIT before selling your house.
Buyer Guidance: I would encourage you to really check out anything and everything you are told by a well meaning seller. Employ the services of a Buyer's Agent to help you discern what you read and listen to about the area you are thinking of calling home. I would also urge you to get my FREE BUYERS TOOLKIT before heading out on the journey to find your new house.
Try this link to help you find your next home: Fairfax Homes For Sale When you land on the main page try one of our custom searches listed on the bottom of the page. No registration is necessary for the Fairfax MLS general search on my site. If you check the box to receive automated updates sent to your email, you will be required to give us your name and a valid email address.
Northern Virginia Information - Here you will find answers to your questions about schools, auto registration, taxes, things to do this weekend, popular destinations. It only takes a moment to look and it is free with no registration required!
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