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6 Tips to Navigate an Uncertain Real Estate Market

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Maybe you’re hearing it in the headlines and seeing it in the tickers underneath the local news. When interest rates and the real estate market become a hot topic, it’s part of our everyday conversations. You may ask yourself, Is it a good time to buy a house right now? Only you (with the help of experts) can know what the right financial decision is for you, but with the right tools the answer can still be yes. With so much to keep up with, navigating an uncertain real estate market can seem intimidating. Don’t worry, we got you! Here are 6 tips to help keep you in tune and on track when buying a home in this market.

1. Go in with a plan and understand the process. If you’ve never bought a house before (or even if it has been a few years), the lingo surrounding the mortgage process can sometimes sound like gibberish. For many of us, we’ll only think about buying a house a few times in our life. Before you start researching real estate 101 classes, check out our resources on buying a home and the mortgage process. These will help you understand the specifics of financing a home and give you the tools to start shopping for a house, prepared.

2. Mortgage rate lock. Keeping up with fluctuating interest rates is a full-time job. Rather than checking rates daily, consider locking in your interest rate. Through programs like Virginia Credit Union’s Lock & Shop program, you can take some of the pressure out of finding a home before rates change. VACU’s Lock & Shop program lets you lock in your rate for up to 360 days while you shop. That’s almost a whole year of knowing exactly what your mortgage rate will be! A mortgage rate lock is multi-faceted. There are float down options, as well as other terms. Familiarize yourself with the basics of a mortgage rate lock and talk to a mortgage loan officer to learn more.

3. Adjustable rate mortgages. An adjustable rate mortgage (or ARM) is just as it sounds. It’s a mortgage that fluctuates with the rate market. Unlike a fixed-rate mortgage where the rate stays locked-in for the life of the loan, the interest rate on an ARM will change after a set period of time. This is a great option for buyers looking for an initial lower payment or buyers who don’t see themselves staying at the house for long. This is also a good choice if rates are expected to go down in a few years. In a case like that, a buyer could refinance with a fixed-rate loan down the line. See how much your potential ARM payments would be, with our handy calculator.

4. 2/1 temporary buydown. Rates impact sellers and builders as well. Say John’s lease is expiring at the end of the year. If interest rates are too high, John might prefer renting another year over fighting the real estate market. So, how can sellers or builders encourage John to buy? A seller or builder can fund a 2/1 temporary buydown, which reduces the buyer’s interest rate by 2% for the first year and 1% for the second year. This temporary reduction is an incentive to the buyer! For John, suddenly the interest rates aren’t so high and his apartment isn’t so appealing. For sellers, this helps a property sell quicker and for a good price. If you’re a seller, REALTOR®, or builder, talk to us to learn more.

5. Have a trusted team. As soon as you say you’re buying a house… suddenly everyone has a REALTOR® they know and urge you to use. Buying a home can be the biggest purchase some of us make, so trusting your team is vital. When choosing your realty team (your REALTOR® and your mortgage loan officer) be sure to choose someone local and knowledgeable. You want a team that knows the local market and has the experience to match. A way to save time, money, and headaches? Choose a team that has everything you need under one roof. (Hint, we’ve got financing, realty, and insurance—all under one roof.) All-in-one teams can often offer exclusive discounts towards closing costs, like our Welcome Home Discount!

6. Stay in the know with rates. Consider staying up to date on the rise and fall of interest rates. But, instead of monitoring the day-to-day fluctuations, look at long-term trends within the market. You can always find our current rates here. Luckily, a trusted and experienced mortgage loan officer will stay in the know for you. Our MLOs will monitor the rate environment for you, give you advice, and help you find your best deal.

Remember, patience might be required. Good things come to those who wait! Look at your timelines, try to be flexible, and stay positive. Your perfect home might not be first one you tour, or even the first one you put an offer on. Research helpful financing programs, like first-time buyer promos, rate locks, or grants to help take off some pressure.

Navigating the current real estate market can seem daunting, but with the right team and resources it doesn’t have to be. Find a trusted and experienced team to help you understand your financing and get you the best deal for your next dream home.

Here at Virginia Credit Union we have a team of dedicated mortgage loan officers, ready to help you go into this process confidently. Contact our team today!