How To Prepare for Rising Rates
It’s been clear over the last 10 months that mortgage rates are surging upwards in the face of the improving economy. Stock markets are doing better (minus the small dip last week) and housing prices have leveled out. Unemployment is down to 3.7%, which is the lowest it’s been in 10 years. Those of you that bought in the 2013-2015 market, Kudos to you; that was the best time in the last 75 years to do so.
Those of you who didn’t? Don’t worry, there are still many good options for home buying and saving to come. Here are a few tips on leveraging yourself for the future:
CREATE A SAVINGS:
Easier said than done right? Saving is a game, and it’s a game you should play to win, once you look at it that way it becomes a lot easier to hedge your money and see your bank account rise.
1) Create a budget
2) Have something to save for (whether it be a vacation, a new vehicle or something fun for you and the husband/wife)
3) Record your expenses (A program like quick books or Mint can help with this very easily)
4) Pick your priorities (saving comes with sacrifice, you must pick the items you are willing to let go of)
5) Track your progress. (watch your account grow and use the budgeting tools to constantly get more efficient)
6) Invest: ( You are bound to spend money, it’s fun right? Spend it on something like a 401K or IRA)
Adding to your 401K is a fantastic way to reduce debt and increase savings
LOWER DEBT
Another one that is much easier “said than done”. Debt seems to be a facet of human life, but it doesn’t have to be such a burden. Here are a few ways to responsibly handle your debt:
1) Keep fewer Credit cards (Don’t open up every credit card under the sun just because it saves your 5% on that purchase)
2) Shop practically (Don’t buy the $60,000 vehicle with the $700.00 monthly payment when you get by with the mini van)
3) Cut 1 unnecessary expense a month (Do you get a new pair of shoes every month? Or do you eat out at lunch every day?)
4) Practice good upkeep of the items you have (We live in a throwaway culture. Practice keeping your vehicles/ house / apartment in good working order so it avoids costly repairs and cleaning later)
Lenders are looking for applicants that have responsible debt loads and decent credit. If you follow the aforementioned steps above you can easily attain both. It will take practice, but if you make it a game you should have some real luck with seeing your bank account grow.
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Justin Scott
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