These days, if you’re even remotely thinking about buying a home, you are focusing on mortgage rates. We all wish they would come down from more than they have over the past 12 months45 days. And, if you’ve heard the trajectory of the November .25% cut by the Fed, you were somewhat hopeful the rate decline everyone heard about, would become reality.
Unfortunately, regardless of what you may have heard from the media or friends, any changes to the fed rate don't necessarily where mortgage rates will go.
A combination of the Fed, inflation, geopolitical changes and the job market, among a whole list of other factors, influence mortgage rates. While the Fed set in motion the trend for mortgage rates to come down, it will most likely be a gradual and bumpy ride down in to the mid-5% range.
You may be tempted to wait for rates to fall, but know it’s not easy to “time the market” perfectly. There’s just too much that can have an impact. Know at this time, home prices for 2025 and 2026 in here in Southern California show no sign of shifting downward unless inflation starts to tick back up or a glut of homes come on the market. With that said, I recommend focusing on the things you do have control of to position yourself to buy when the time is right. Here are 3 areas I would focus on:
Your Credit Score
Your credit score is one of the most important factors when applying for a mortgage. A few points one way or the other can make a significant difference as to what you pay for a monthly mortgage. In most cases, a higher credit score equals a better rate.
Maintaining a good credit score is key to getting the best possible rate.
Your Loan Type
Navigating the path to a successful home purchase includes searching for and finding a mortgage loan that best fits your situation. There are so many types of loans and loan products out there these days – conventional, FHA, USDA, VA, Assumable etc. And rates can vary greatly depending on the loan you choose.
The Term of Your Loan
The length of time it will take to repay your loan also provides options. Your loan term affects your interest rate, monthly payment and total amount owed over the life of he loan. Typical mortgage terms are 15, 20 and 30 year terms.
Although you can’t control what happens in the broader economy or when mortgage rates will come down to a level you feel comfortable with, setting into motion steps you can take to help you succeed should start now.
I can help you navigate the path to a success, give me a call, text, email or DM. Let’s go over what you can do now that will make a difference when you’re ready to make a move.
