If you’re thinking about buying a home, mortgage rates are probably one of the biggest factors on your mind.
And when rates move up and down, it’s tempting to wait and hope they’ll drop before you make your move.
But here’s the thing: you can’t control what happens with mortgage rates.
What you can control are some of the factors that influence the rate you personally qualify for.
If buying a home is part of your plan, here are three areas worth focusing on.
1. Strengthen Your Credit
Your credit score can play an important role in the mortgage rate and loan terms lenders offer you.
Generally, a stronger credit profile can give you access to more financing options and potentially better loan terms.
Before buying, consider reviewing your credit and looking for opportunities to strengthen it.
That might mean:
- Paying bills on time
- Reducing credit card balances
- Avoiding unnecessary new debt
- Checking your credit report for errors
- Talking with a lender about what could improve your borrowing position
Even if you aren’t ready to buy tomorrow, working on your credit now could put you in a stronger position when the right home comes along.
2. Compare Your Loan Options
Not every mortgage is structured the same way.
Conventional, FHA, VA, USDA, fixed-rate, and adjustable-rate mortgages can have different requirements, rates, costs, and tradeoffs. Loan terms such as 15, 20, or 30 years can also affect both your monthly payment and how much interest you pay over time.
That’s why it can be helpful to talk with a knowledgeable lender rather than assuming the first mortgage quote you receive is your only option.
You may also want to compare multiple lenders.
The goal isn’t simply to find the lowest advertised rate. It’s to understand the overall cost and structure of the loan and choose an option that fits your finances and long-term plans.
3. Don’t Overlook New Construction
The type of home you purchase could also affect your financing opportunities.
Some homebuilders offer buyer incentives, including mortgage-rate buydowns, closing-cost assistance, or other financing promotions designed to make their homes more attractive.
KCM notes that Realtor.com data showed buyers of newly built homes received a lower average mortgage rate last quarter than buyers of existing homes. (Keeping Current Matters)
That doesn’t automatically make new construction the right choice for every buyer. You still need to compare the home’s price, location, HOA costs, taxes, upgrades, incentives, and financing terms.
But if affordability is one of your biggest concerns, new construction may be worth including in your search.
Focus on What You Can Control
Mortgage rates are influenced by larger economic forces, including inflation, economic data, global events, and monetary policy. (Keeping Current Matters)
Those factors are outside your control.
Your financial preparation isn’t.
Instead of trying to perfectly time the market, focus on putting yourself in the strongest position possible.
Improve your credit where you can. Explore different financing options. Compare lenders. And keep an open mind about the types of homes available to you.
What Does This Mean for East Bay Buyers?
Buying a home in Castro Valley, San Ramon, Hayward, Pleasanton, or another East Bay community can involve a significant financial commitment.
That makes understanding your total monthly housing cost especially important.
Before starting your search, work with your lender to determine what different home prices and loan structures could mean for your monthly payment.
Then, work with a local real estate professional to focus your search on homes that fit both your lifestyle and financial goals.
The Bottom Line
You can’t control where mortgage rates go next.
But you can control how prepared you are.
Your credit, financing strategy, and the homes you consider can all influence your buying options.
So, rather than putting your plans completely on hold while waiting for the “perfect” mortgage rate, start by understanding what you qualify for today.
Thinking about buying a home in the East Bay? Let’s explore your options and build a home search around your goals and budget.