Through the pandemic, interest rates have been at an all-time low. If you have a preapproval from during this period, it’s important to be aware of the current rise in interest rates and how it will affect you and your current preapproval. During this period of the highest inflation since the early 1980’s, Buyers should be prepared for how the rising interest rates will affect their buying power, especially in this highly competitive market.
Therefore, working with a knowledgeable and experienced agent is important. We will continually check in and urge you as a buyer to update your preapproval or go farther with a pre-commitment. Interest rates do affect your buying power and what you are able to commit to in terms of a monthly payment. Updating your preapproval now will help you avoid being caught off guard when it comes time to make an offer.
Low Inventory – High Demand
Regardless of interest rates, homes are continuing to appreciate because demand continues to exceed the available inventory. This continues to result in multiple offer situations that often drive the sale price above where they will likely appraise. When the appraisal comes in lower than the purchase price, the buyer may opt to bridge the appraisal gap with additional cash. Working with a knowledgeable agent will give you insight into your options for the appraisal gap or appraisal contingencies while also staying within your financial means.
As experienced Realtors, we are here to help… interested in learning more about how to get approved or more learn about appraisal gaps? Contact Us!