Make Money From Home

How to negotiate a mortgage in Minnesota when rates are rising quickly – Star Tribune


Home buyers this spring are facing a double-whammy: Mortgage rates have increased to the highest level in more than a decade and house prices are now at record highs.

The result is that monthly house payments soared compared with just a few months ago.

Wondering how to shop for a house at a time when rates are moving quickly? We asked several Twin Cities housing experts for advice for home buyers.

What to remember

The average rate for a 30-year fixed-rate mortgage was 5.27%, according to the latest weekly survey from Freddie Mac. Though that’s the highest in more than a decade, that’s still a relatively low rate. Over the past several decades, the average 30-year rate was about 8%.

Though mortgage rates have risen faster than anyone predicted, rates aren’t expected to go down anytime soon. In fact, there’s still upward pressure on rates in the coming months so there’s an expectation that rates could increase slightly.

If you’ve been putting off home buying because you’re worried that there aren’t enough houses on the market, don’t despair. There’s been a recent spike in new listings and declines in pending sales, suggesting a slight increase in the number of homes that will be for sale in the coming months. With borrowing costs on the rise, buyers should be less likely to be making the kinds of wild, over-list price offers that were common last fall and earlier this year.

The very first thing you should do

One of the very best ways to get the lowest possible mortgage rate is making sure you have the highest credit score possible. If you have bad credit, lenders will charge you a higher rate because you’re more likely to miss a payment or default on your mortgage.

Talking to a homeownership counselor or financial adviser who can help you pull a credit report and determine the best — and fastest — way to improve your credit score. That’s true whether you’re buying your first home or your last one.

The Twin Cities has an extensive network of home-buyer programs that provide counseling services to buyers, including PRG Inc., which not only provides prepurchase counseling, but also access to down-payment assistance programs and other home-buyer programs.

Jeff Wills, program manager for PRG, said that buyers will often start their house hunt by first talking with a real estate agent or mortgage adviser. Those professionals only get paid if you buy a house, so he recommends talking a nonprofit …….


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