If you’ve been sitting on the sidelines and waiting for the right time to build a custom dream home, the steep rise in interest rates – and in turn, higher mortgage rates – may have turned that into more of a nightmare.
But there is good news! Even with the average 30-year fixed mortgage rate sitting at 6.83% today (October 5, 2022), you may still have several options available to you that could allow you to keep moving forward.
These can include:
- Starting with an ARM (adjustable rate mortgage)
- Submitting a larger down payment
- Taking over the project that another would-be homeowner has cancelled
An adjustable rate mortgage could allow you to get in at a lower rate than a 30-year fixed rate mortgage. For instance, the average 5/1 ARM today is under 6%. If you go this route, it may allow you to “buy” some time, and then refinance later if mortgage rates fall in the future.
You could also submit a larger down payment on your new custom home. In this case, banks and other lenders see the mortgage as less risky when home buyers put down more of their own money, so they will oftentimes “tradeoff” with a lower interest rate on the loan.
Another potential alternative is to take over a potential home builder’s project. For instance, given that home buyers can typically only lock in an interest rate on a mortgage for between three and six months, some people have abandoned their new home builds. Therefore, it may be possible for you to purchase from a motivated seller at a reduced price, and complete the home project from there.
If Orlando or the surrounding Central Florida area is where your new custom home will be, give WJ Homes a call at (803) 317-8912 to discuss your objectives, as well as your options for moving forward. You can also send us an email with any questions that you may have by going to https://w-jhomes.com/contact-us/. We look forward to hearing from you.
Sources:
Today’s mortgage & refinance rates, October 5, 2022: Rates still low. Bankrate. https://www.bankrate.com/mortgages/todays-rates/mortgage-rates-for-wednesday-october-5-2022/