What To Do When Faced With High Interest Rates Article

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What to do when faced with high interest rates

This article describes two helpful tips to follow when you are looking to refinance or purchase a home and interest rates rise.

Author: Ben Brashen

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With all of the volatility in mortgage rates, many buyers may be left scratching their heads. After all, you've been looking for the perfect place for months now. You knew what your mortgage payment was going to be. And then...2 things happen at once. You found the perfect place and mortgage rates jumped like a super charged kangaroo. What can you do?

Believe it or not, you may have the chance to use this to your advantage. With sellers still happy to have an offer on the table, you hold the cards. There are 2 ways you can use the rise in interest rates to your favor.

1) When you're making an offer, ask for a reduction in the sales price to get your payment where you expected it to be. This may be a pretty large reduction but rates went up, and that's what you can afford. Reduction in sales price can be a short term solution with very long term benefits since you will have bought the home for much less than anticipated.

2) Request that the seller pay enough points to buy down your interest rate to a payment you're comfortable with. The cost to the seller is much less using this strategy and still will work in your favor over the long term. Your payment will be right where you want it and your sales price will not change.

Using either of these strategies will also allow you to see if rates come down further before you close. That's the best case scenario.

About Author

Ben Brashen CMPS, founder of MyZip Lending has held the designation of certified mortgage planning specialist for more than seven years. Ben holds credentials as a Certified Mortgage Planning Specialist and is a California Ethics Certified Financial Strategist. With more than 100 million dollars in loans funded, Ben has the unique ability to provide individual attention to help his clients define and achieve their short-and long-term personal and financial goals.

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What to do when faced with high interest rates