What You Should Do Before Interest Rates Rise
Helpful tips from SRM Real Estate Group’s sister company, Boost Mortgage
By Scott Morris
In today’s real estate market, mortgage interest rates are near record lows. If you’ve been in your current home for several years and haven’t refinanced lately, there’s a good chance you have a mortgage with an interest rate higher than today’s average. Here are some options you should consider if you want to take advantage of today’s current low rates before they rise.
Sell and Move Up (or Downsize)
Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.
The chart below shows average mortgage rates by decade compared to where they are today:
Today’s rates are below 3%, but experts forecast rates to rise over the next few years.
If the interest rate on your current mortgage is higher than today’s average, take advantage of this opportunity by making a move and securing a lower rate. Lower rates mean you may be able to get more house for your money and still have a lower monthly mortgage payment than you might expect.
Waiting, however, might mean you miss out on this historic opportunity. Let’s go into how your monthly payment will change if you buy a home as mortgage rates increase.
Breaking it All Down
Using the chart to the right, let’s look at the breakdown of a $300,000 mortgage:
When mortgage rates rise, so does the monthly payment you can secure.
Even the smallest increase in rates can make a difference in your monthly mortgage payment.
As interest rates rise, you’ll need to look at a lower-priced home to try and keep the same target monthly payment, meaning you may end up with less home for your money.
No matter what, whether you’re looking to make a move up or downsize to a home that better suits your needs, now is the time. Even a small change in interest rates can have a big impact on your purchasing power.
Refinance
If making a move right now still doesn’t feel right for you, consider refinancing. With the current low mortgage rates, refinancing is a great option if you’re looking to lower your monthly payments and stay in your current home.
Bottom Line
Take advantage of today’s low rates before they begin to rise. Whether you’re thinking about moving up, downsizing, or refinancing, let’s connect today to discuss which option is best for you.
Feel free to reach out to us at (818) 262-3695, email connect@srmrealestategroup.com, or schedule a no-obligation introductory call online. We can’t wait to connect with you!
About Scott
Scott Morris is the Founder and CEO of SRM Real Estate Group, a Los Angeles real estate and mortgage company that does things differently. With over 30 years of experience, Scott’s passion and innovative approach to real estate is found in the promise he makes to every client: when you partner with the SRM team, you’ll save money, time, and together we’ll change lives. After his son’s Type 1 diabetes diagnosis, Scott’s life took on new meaning. He created a purpose-driven business model to put people before profits. With each successful closing, he donates a portion of his earnings to his client’s preferred charity and to the Juvenile Diabetes Research Foundation. Scott delivers deep knowledge of the local market, exceptional negotiating skills, and marketing savvy, all while helping his clients avoid high commissions and unnecessary fees.
Scott has served on the board of the Juvenile Diabetes Research Foundation’s (JDRF) Los Angeles chapter and is an active participant in their Ride-to-Cure program. When he’s not working, Scott enjoys spending time with his wife, Kelly, and his children, Ryan and Katie. He also enjoys cycling, baseball, and writing. To learn more about Scott, connect with him on LinkedIn.