Less is More...

If you're new to investing or real estate and don't know the first thing about interest rates, here's a good tip: the higher the interest rate, the more expensive it's going to be. High interest rates mean you will have to pay back more on the money you borrow. Another good rule of thumb is that affordability decreases as interest rates increase.  Some use the rule of thumb that for every 1% interest rates increase, buying power decreases by 10%!  Of course, there will be a wide range of prices that you can choose from, depending on what kind of financing you choose.  Banks often compete by reducing interest rates, so it can literally pay off for a qualified buyer to shop around for the best financing terms. 

Not even the Fed knows for sure...

The Fed holds a considerable amount of power over interest rates, but they can't control everything.  Mortgage interest rates are affected by many unpredictable political, economic and social events. There is no guarantee what direction interest rates will go, despite the forecasts of the experts. Therefore, make your financial decision based on where things are today including your budget, your needs and your future plans. If you feel the timing and terms are in your favor, ask your lender to lock you in to a rate that is satisfactory to you.

Locking in rates assures your lowest interest...

If you do decide you want to lock in at a certain interest rate, you will need to complete a loan application and send it to your lender as soon as possible. This must be done so that your commitment doesn't run out before your loan is approved. Follow up and be  sure that the lender is receiving all of the necessary documentation. Have your lender order a property appraisal (a condition of the loan), which usually costs between $300 and $500, as soon as possible.

Don't obsess and miss a good real estate deal...

Although rising interest rates can create more problems for home buyers, waiting and hoping for low rates is not necessarily a smart move. You may end up paying a higher price. Also, refinancing is always an option in the event that interest rates come down. Ask your New Age Realtor or your local lender what the recent interest rates trends have been.