Navigating 8% Interest Rates

Well, it happened. For the first time in over 20 years, we crossed the threshold into 8% mortgage rates. 
 
You may remember 23 years ago. Survivor was the #1 TV show, Breathe by Faith Hill was the #1 chart topping single of the year, and astronauts entered the International Space Station for the first time. 
 
Everything comes back, right? I was in high school at that time 23 years ago, and there are some things I would prefer stay in the past (like low rise jeans, no thanks!). Wouldn’t it be wonderful if we could keep higher interest rates in the halls of history also?
 
Here’s the thing: we can only work within the boundaries of the current time, place, and market we’re in. If you’re someone looking at making a home purchase that you’ll finance, and these rates sound scary, here are some tips to help you navigate this time.
 
  • If you're concerned about your monthly payment getting out of budget, talk to your lender about a permanent interest rate buy-down. For most people, paying a lower interest rate will save you more money each month than if you were to have a much l lower sale price.
  • If the additional cash to pay for that rate buy down means you don’t have enough to also pay your closing costs and down payment, get strategic with your agent. Ask about negotiating an interest rate buy-down into the offer you’ll write on a property as a seller paid credit. 
  • They are out there, but this may not be a good fit for everyone. Look for homes that have assumable interest rates. It does require more work on the part of the seller, you have to apply with that seller’s lender, and you need have the difference between what is owed by the seller and current sale price in cash. 
For most people, using permanent rate buy downs has a real impact depending on your purchase price, it could be hundreds of dollars. 
 
If you have questions about how to use these tactics in a negotiation, I have had great success with several buyers this year asking for seller paid credits for rate buy downs. I’m here to help, so please reach out.
 
PS: If you don’t already follow me on social media, I frequently post about the real estate market and other tips and tricks. I’d love for you to join my community! 

Work With Jennifer

Jennifer is an expert marketer with the know-how, ideas, and creativity to help her clients through the entire real estate process. Whether you're new to the area or a fellow native Oregonian, Jennifer would love to be your go-to resource for all things real estate in the greater Clackamas County area.