What Climbing Mortgage Rates Mean for You

If you have been considering buying a home this year, you may have heard that mortgage rates are rising. In May 2018, the national mortgage rate for a standard 30-year fixed mortgage rose as high as it had in 2014. Projections show the pattern will continue. Although this is a good sign for the overall economy, rising interest rates can yield questions for homebuyers about affordability and how to negotiate the best price for a new home. First New Mexico Bank shares these tips:

Home Affordability in Doña Ana County

There are several factors to consider when calculating the affordability of a home. Along with cost per square foot, taxes and private mortgage insurance (PMI), new homeowners should also consider increased mortgage rates. When homeownership rises, available home inventory decreases, which means buyers in Doña Ana County may see the cost of homes increase. That is why now may be a good time to lock in mortgage rates for loans.

Negotiating Your New Home Purchase

When there is a surplus of homes available for purchase, the buyer has an advantage at the negotiation table. However, as mortgage rates increase and inventory decreases, it will become harder to get a sweetheart deal. When current homeowners see rates climbing, they become less motivated to sell as they benefit from the low interest rates they have already secured. On the other hand, it will be more expensive for them to upgrade to a larger home as rates rise.

First-time homebuyers seeking loans are particularly affected by these changes in mortgage rates. When current homeowners become less inclined to put their house on the market, negotiations are more likely to favor sellers. This will shift Doña Ana County to a “seller’s market,” a drastic change from previous years.

It May Not Be Too Late to Get a Good Mortgage Rate

“The good news is that if you’re considering investing in a home, now is a good time to take that step before rates rise, as expected,” said Donna Stryker, Senior Vice President and mortgage lender at First New Mexico Bank.

As a New Mexico Mortgage Finance Authority (MFA) approved lender, First New Mexico Bank can help make the home buying process easy and affordable. The MFA program is designed to help provide financing to make quality affordable housing and other related services available to low and moderate-income New Mexicans. Using funding from housing bonds, tax credits and other federal and state agencies, MFA provides resources to supply down payment assistance along with other services. First New Mexico Bank will help you every step of the way to identify if you are qualified for the program and proceed to help you take advantage of the benefits during your home buying process.

Beat rising mortgage rates and call First New Mexico Bank today at 575-556-3000. To see what today’s rate is, check here.  If you’re interested in building a home, see our article Building a Home? Read This First.