While we can’t answer these questions for you, we can help ensure that you are as prepared as possible. As you go through the process, we aim to provide resources to keep you informed and help you secure a mortgage that fits your budget. Our mortgage expert Carolyn Morganbesser answered some of the most important questions to guide your homebuying journey.

How would you describe the current lending environment for homebuyers?

There are still mortgage options for buyers, even in this high-rate environment. Unfortunately, it is still a seller’s market, with low inventory and multiple offers on listed properties.

What trends are you seeing in mortgage interest rates, and how do they affect borrower strategy?

Interest rates react to the stock market, and rising interest rates affect the borrowing power of many applicants. The higher the rate, the higher the monthly payment, and the less a buyer might qualify for.

What are the most common misconceptions homebuyers, especially first-timers, have about mortgages?

Many home buyers think you must make a down payment of 20%, when in fact, first time home buyers can obtain a conventional mortgage with as little as 3% down.

What advice do you give buyers to help them feel more prepared and confident during the loan application process?

The best advice I can give is to speak to a mortgage loan officer well in advance of buying a house. We can go over income requirements, credit scores, and documentation you will need. This makes the application process go much more smoothly.

How important is credit score today, compared to other factors like income or debt-to-income ratio?

Credit scores and debt to income ratio are both extremely important. Your income and assets also play a vital role in determining how much you can afford.

Are adjustable-rate mortgages more attractive in a higher rate environment?

Adjustable-rate mortgages are a great option, because they usually offer a lower interest rate than fixed rate mortgages and give the buyer more qualifying power. However, many home buyers are more comfortable with a fixed rate mortgage. There is no right or wrong decision, it is really what the buyer is more comfortable with.

What are mortgage points?

Mortgage points are what the borrower would pay to obtain a lower interest rate. Depending upon the discount, points can be a great option for a buyer. However, you must keep in mind that paying points increases closing costs, so you will need to secure additional funds.

What’s your perspective on buyers competing with cash offers?

Buyers are having a difficult time competing with cash offers, since they’re a popular option right now. Many homeowners and real estate agents feel that cash offers will close more quickly than offers from someone who has to get a mortgage. However, obtaining the right mortgage can help you afford your perfect house without overextending your finances too much.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person's circumstances differ and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and legal counsel to discuss your particular needs before making any financial or other commitments regarding the matters related to your condition.