New reports from Bankrate.com show that both mortgage rates and closing costs have increased–a sign it may be time to try to buy a home while you still can. According to the banking website, the 30-year fixed mortgage increased by 0.06 percent while closing costs having seen a 36.6 percent increase. So while home prices are still reasonable, it may be time to try to buy a home.
Mortgage Rates Increase Along with Closing Costs
After over a month of record low rates, Bankrate finally reports that 30-year fixed mortgage interest rates increased on Thursday to 4.63 percent, which are still among the lowest ever seen. The 15-year fixed mortgage also increased to 4.16 percent from 4.06 percent.
They revealed in a separate survey that closing costs have seen a sharp increase in the past year. According to the national survey, closing costs have increased from $2,739 last year to $3,741 this year. However, it should be noted that the estimate from this year could be a bit high since companies are penalized for underestimating these costs.
Buying Homes Helps Repair the Market
With closing costs increasing and mortgage rates possibly on their way up, this may be a good time to buy a home if you’re interested. Purchasing not only gets buyers into homes but helps to improve the market as a whole, since it’s difficult for a neighborhood to flourish when many of the homes on the block are empty due to foreclosures.
Of course, lenders have been a lot more particular about who they want to lend to, which has made it difficult for some buyers with lower FICO scores (due to job loss, foreclosure or other unforeseen issues) to qualify for the funding. However, there are some options to consider if you’re in the market. Here are a few:
- Find a bad credit lender: All lenders will not turn down those with bad credit, especially if you don’t have major issues like repossessions, tax liens, court filings or bankruptcies. Look around. You might be surprised by what you find.
- Consider renting to own: Some lenders are so eager to get someone in their homes that they are offering rent-to-own programs. You start by renting a home and some of your rent payment goes toward a down payment on the house.
- Work through HUD: The Department of Housing and Urban Development (HUD) offers programs that help low-income families get into homes. See what they have to offer!
The last thing you want to do is to wait until mortgage rates skyrocket (along with home prices) before looking for your new home. While rates are still reasonable, it’s good to go ahead and explore your options.