Understanding How Financial Trends May Impact Homebuying

Recent discussions have highlighted the impact of COVID-19 and fiscal policy on the American housing market. Observations in financial trends indicate a decline in sales due to the rise in mortgage rates. So how are you supposed to know when it’s a good time for you to buy your home? While the answer will vary depending on your financial situation, and your housing needs, there are a few things you can consider to stay abreast of upcoming developments in the real estate market.

The Long-Term financial impact of interest rates

When you inquire or apply for a home loan, your loan estimate will show you the interest rate your lender is willing to offer you. (Remember- this rate is subject to change until it is “locked.”) Those with a higher interest rate should expect to pay significantly more over the life of their loan. Since a lower monthly payment is so attractive to prospective homebuyers, the real estate market has a tendency to slow down when interest rates are high.

What do you do if you’re stuck with an interest rate you’re not happy with? Consider refinancing, a process that lets you update the current mortgage rate on your home with one that has more favorable terms. The Federal Savings Bank specializes in helping homeowners refinance their homes with as little impact on their daily lives as possible. Consider speaking with a member of our team about your financial situation, and the options that may already be available to you.

Staying Competitive as a Homebuyer in the Real Estate Market

According to a report by Yahoo! Finance, rising home prices have caused younger homebuyers to seek help “from family and other loved ones.” The report goes on to cite a LendingTree report finding “78% of Gen Z and 54% of millennial homeowners received some type of financial assistance for a down payment.” But don’t fret if this is not an option for you. There are many state and federal programs intended to help Americans acquire their first home, including programs for veterans that allow eligible borrowers as little as 0% down payment on your home purchase. (Learn more about qualifying for down payment assistance.)

Consider identifying and getting in touch with a home lender before you settle on a home, or even before you start searching. A well-informed loan officer ought to be a part of your team, helping you all the way to the closing table with the kind of experience and character that is core to our values. Not ready to get in touch just yet? Check out our Learning Center, a complementary resource presented by The Federal Savings Bank for information on homebuying and home financing.

Subject to credit approval. Terms and conditions may apply. Subject to VA eligibility requirements. Property insurance is required on all loans secured by property. 

Down payment assistance requirements are based on the mortgage insurer or guarantor’s guidelines. Borrower may fund down payment and closing costs.  Down Payment Assistance Program, which assist eligible homebuyers with purchasing a home. Down payment assistance programs are not eligible for all potential homebuyers. 

This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information on financial planning or investment advice, consult a registered investment advisor or financial planner. For tax advice, please consult a tax professional.