Less is more

If you're new to investing or just getting into the Burgaw real estate market 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.

The Fed does not control mortgage interest rates

The Fed holds a considerable amount of power, but they can't control everything. Mortgage interest rates are affected by many unpredictable political, economic and social events. So 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.

Lock in to a good mortgage interest rate

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 runout before your loan is approved. Follow up and be se sure that the lender is receiving all of the necessary documentation. Get a Burgaw property appraisal, which usually costs about $300, through your loan agent 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. 

Adjustable Rate Mortgages (ARM)

When you talk to a mortgage broker or lender, you'll find there are many options in Burgaw home financing packages.  There are traditional 30 year fixed rate mortgages and there are adjustable rate mortgages in addition to jumbo loans, FHA loans, VA loans and more.

There are definitely some advantages to choosing an adjustable rate mortgage (ARM).  It may be easier to qualify for a Burgaw home loan and interest rates may be lower in the first 3-5 years depending on the terms of the loan.  But you do need to be wary of when your ARM is set to adjust and to what rate it will adjust.  You may want to consider refinancing before it adjusts because the current interest rates may be lower than the rate to which your loan will adjust after 3 - 5 years.