Published April 2, 2024
Tackling High Mortgage Rates: Your Guide to Lower Payments
As mortgage rates hit peaks unseen in recent history, the dream of homeownership may feel out of reach for many. However, the climb doesn't have to be insurmountable. This month, there are strategies you can employ to ensure that high rates don't keep you from unlocking the door to your new home. Here's how you can bring those potential payments down to earth:
1. Consider an Adjustable-Rate Mortgage (ARM)
An ARM typically starts with a lower rate than fixed-rate mortgages. If you're confident that mortgage rates will decrease in the near future, an ARM could reduce your initial payments. Remember, though, this is a bit of a gamble - if rates don't fall, your payments might increase down the line.
2. Purchase Points to Lower Your Rate
Fronting more cash initially through buying mortgage points can secure you a lower interest rate. But make sure the math checks out: calculate when you'll break even. If you're planning on refinancing before hitting that point, this strategy might not be cost-effective.
3. Polish Your Credit Score
A sterling credit score can unlock better rates, potentially saving you a bundle over the life of your mortgage. Achieve this by keeping up with bill payments, managing your credit utilization wisely, and rectifying any inaccuracies on your credit report.
4. Shop Around
