Does the news of current interest rates have you feeling confused or unsure if it’s the right time for you to finance a home? Padraic Robertson, President of Coastal Custom Mortgage, provides his expert opinion on today’s mortgage interest rates and why prospective buyers shouldn’t feel discouraged by the current market.

As Padraic explains, “Interest rates have been historically low for several years. So, while they have gone up and are a bit higher than we’ve seen in some time, they are actually more average in the grand scheme of things.”

The Federal Reserve, or “the Fed,” is the largest financial institution in the nation, and its primary job is to settle interest rates, manage the country’s money supply, and regulate financial markets. During the pandemic, the Fed lending rate decreased drastically to around 0-0.25%, resulting in a devalued dollar and eventual inflation. As Padraic explains, the Fed rate had to be manipulated in order to combat this man-made inflation.

The increased Fed rate impacts your means of revolving credit, including your credit cards, car loans, etc., and, surprisingly, does not directly affect mortgage rates. Instead, mortgage rates fluctuate with the market.

Overall, Padraic does not feel that the market is currently in a bad place. However, if you are a first-time homebuyer feeling wary of purchasing a home, Padraic advises, “There is a cost to waiting. You have to live somewhere, meaning you’ll either be renting or need a mortgage. With renting, you’re paying 100% interest. You have no equity, and you’re not actively building wealth.”

If he could impart any advice to those looking to buy a home in the current market, it would be to consult with a trusted lender rather than online mortgage calculators.

“Find out exactly what you qualify for and what a realistic payment would look like for you,” Padraic says. “Remember that what you qualify for may be over your comfort level. More than house size, neighborhood, etc., take the time to truly consider what you want your payment to be and look for a house within that range.”

Are you ready to start your home buying journey and wondering what you qualify for or what your budget should be? The professionals at Coastal Custom Mortgage can help! Contact us today to get started.