Mortgage rates on Chicago’s North Shore are up and possibly may rise higher. The current 30-year mortgage average is hovering just under 4 at 3.9%. With the continual uptick many would-be buyers are concerned that their chances at owning a slice of the American dream have gone out the window. Comparatively, those who were in the process of refinancing their mortgages are now wondering if it’s worth the time or trouble to follow through. So, what is a North Shore home buyer to do in this type of situation? There are a few options to explore that we would like to advise buyers to look into before pulling the plug on their North Shore home search.
Choose an Adjustable Rate Mortgage
If you would like to lower your interest rate for a set period of time, you could opt for a 10 or 5-year ARM to keep the payments down. Just keep in mind that in 10 years that rate may go up quite a bit as it’s hard to predict the market in 5-10 years.
Ask your lender about a float-down option
Not all lenders offer a float-down option, but it’s worth inquiring about. With a float-down, the borrower has a right to have his or her mortgage rate reduced if rates happen to fall. This option can be attached to any type of loan, and the terms are at the discretion of each individual lender.
Wait for the market to calm
As always, North Shore home buyers do have the option to wait it out for a week or so and see where mortgage rates go from here. There’s a chance they may drop slightly, but there’s no guarantee. If they appear to hold steady, it might be a good idea to lock in now rather than risk falling victim to another increase down the road.
To learn more about current real estate market trends or to start your next home journey, contact Heidi and Marty today.