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What Home Buyers Can Expect From Mortgage Rates in 2022

With inflation on the rise and a recovering economy, home buyers will have to put on their brave faces and go to bat for their dream homes in 2022. The good news is, most financial analysts and experts agree that the market shouldn’t be nearly as intense as in 2021.

Most economic pros predict mortgage interest rates will rise in 2022.

Most experts agree that mortgage rates will slowly climb to about 3.6% by the end of 2022. The Federal Reserve is tapering asset purchases, and everyone will feel the effects on mortgage rates. Moreover, inflation is rising, and a slowly recovering economy will put pressure on mortgage rates.

However, if you’re a home buyer, don’t be discouraged. While rates are ticking upward, they are still pretty low. Suppose other aspects of real estate improve, such as if inventory or pricing becomes more buyer-friendly, higher rates won’t feel as heavy of a burden. That said, our advice is not to wait to start looking and planning.

What does this mean for home buyers?

– There will be a shortage of homes for sale. Many millennials are trying to buy houses right now, and there have not been enough houses built over the past decade to reach their demand. Limited inventory means more competition

– There will be lots of competition. Be prepared by understanding what you can afford, having a list of your needs in a home, and acting fast when you find a home that meets your requirements. Of course, avoid panic buying because you feel the pressure to move quickly. Know what you can afford and honor your list of needs/wants in your home.

– Home prices will continue to rise, but at a slower pace than 2021. Home values skyrocketed in 2021, and while prices aren’t expected to drop in 2022, they will likely increase at a much slower rate than last year. Buyers will probably still face competitive bidding wars, but they won’t be as frequent or intense as last year.

5 tips for first time home buyers on how to prepare for the 2022 market:

1. Do your research way ahead of time. Since mortgage interest rates will likely go up, this could affect your buying power. Understanding your financial situation is essential, and researching neighborhoods you know you can afford will be beneficial.

2. Improve your credit score. If you’re worried about the rising interest rates, focus on increasing your credit score. The higher your score, the more likely you’ll get approved for a more affordable interest rate and a home loan that meets your financial goals.

3. Save for a down payment. Home prices are higher, and you need to save up to put cash down on your down payment if you don’t have the funds already. The good news is there are still loans for as little as 3% down, so make sure you have the cash and work with the right people to get you a great rate. If you need to save up, consider getting a side gig on top of your current job or selling some of your personal items to earn some extra cash.

  1. Find a lender that works for your long-term financial goals. Finding the right mortgage loan is always an important aspect of buying a home, especially when prices are inflated. This is where 1st Eagle Mortgage can step in and help. They’ll find a home loan that meets your individual financial needs and connect you with lenders you wouldn’t be able to access on your own. More options mean more likeliness that you’ll find the right home loan option for you. There are several other advantages to working with a mortgage broker. Check out their website for more information.

  2. Understand what you can afford to avoid panic buying. Understanding your finances and what you can afford is a critical part of being a homeowner. You need to thoroughly comb through your finances and understand your situation before you start even looking for a home so that you don’t panic buy and get stuck with a home and mortgage you can’t afford.

Contact 1st Eagle Mortgage to navigate buying a home in 2022.

As a dedicated mortgage broker service, 1st Eagle Mortgage promises to connect you with a mortgage loan that fits your financial needs and walks you through every step of the home buying and application process.

They have numerous connections to mortgage lenders that you wouldn’t have on your own that can offer lower interest rates, regardless of your financial history. For example, 1st Eagle Mortgage provides home loans for as little as 3% down, even if you have declared bankruptcy, had a short sale or went into foreclosure.

To learn more about 1st Eagle Mortgage, visit our website.

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