In this high-interest-rate environment, many prospective homebuyers are put off by high mortgage costs. Homes that might have been in your budget in the past might no longer be affordable when accounting for monthly interest payments.
But that doesn’t mean the situation is totally out of your control. While mortgage timing can be tricky, you might decide toif interest rates drop, as many will happen in the next year or so.
You can also take a number of steps to improve your financial situation and get a handle on the real estate market now as you’re figuring out when to buy a home.
What prospective homebuyers should do until interest rates drop
In particular, some action items to consider as you wait to see what happens withinclude the following expert-recommend tips:
Figure out what you want
If you’re waiting to see what happens with interest rates, use this time to do more research. That includes narrowing down what you want in a home and what you can realistically afford.
“Use this time to refine exactly what you’re looking for in your next home, including things like what your budget can buy you and what your ‘needs’ and ‘wants’ are,” says Merav Bloch, VP and GM of Opendoor Exclusives. “If you’re willing to trade a longer commute for your dream yard, but your partner wants to be within a 10-minute drive of their office, now is an opportune time to debate that trade-off.”
Even if you’re not necessarily ready to buy right away, you can still tour homes.
“I encourage buyers to see what’s out there and tour as many homes as possible to get a sense of what your budget will get you, what your non-negotiables are and what neighborhoods you’re open to,” Bloch says. “People typically don’t get married on the first date, and it’s usually better not to purchase the first home you tour.”
Talk to experts
As you figure out what you want in a home, it can help to talk to experts like mortgage consultants and real estate agents to narrow down what’s realistic for you.
Tanya Ball, home loans regional director at BOK Financial, suggests asking experts about down payment assistance options as well as “specialized loan programs if you are a veteran, Native American, first-time buyer or buying in a rural area.”
Plus, speaking with an expert like a mortgage professional “can let you know which items to focus on for better offers — for example, a higher down payment or paying off debt,” says Michael Merritt, mortgage servicing operations manager at BOK Financial. “The biggest benefit will vary based on your circumstances, so it is important to focus on the things that will help you the most.”