Mortgage rates remained near a 13-year high this week. Of course, that’s not the only area in which prices are rising. As historically high inflation continues and home prices soar, many homebuyers are struggling to find homes that fit their budgets. Areas with a lower cost of living can be an attractive option. In other news, learn about the potential upsides of a cash-out refinance, even in today’s rising-rate environment.
Most affordable housing markets
It’s still a challenging time to buy a home amid the inventory shortage, rising rates and spiking home prices. States like Georgia and Tennessee offer more affordable housing options as well as lower overall costs for expenses like utilities and groceries. At the metro level, Lansing, Michigan, and Indianapolis are among the most affordable areas, while Los Angeles is the least affordable.
Upsides of a cash-out refinance
Interest rates are rising for all kinds of financial products, including mortgages. While it is costlier to refinance now than it was in prior months, if you’re like many homeowners, you could have substantial equity that you can tap in a cash-out refinance.
Getting a second VA loan
If you have remaining entitlement, you might be eligible for a second VA home loan. Typically, you’d look for a second VA loan if you’re selling your home, refinancing from one VA loan to another or have two or more VA loans for different homes at the same time.
Understanding 7/1 adjustable-rate mortgages
The 7/1 adjustable-rate mortgage (ARM) has a fixed rate for the first seven years, then the rate adjusts yearly for the life of the mortgage. If you don’t plan to stay in the home past the initial seven-year period, a 7/1 ARM might save you significantly on interest. Otherwise, this type of mortgage is a gamble that could stick you with a major increase in payments after the seventh year.
What to know as a first-time homebuyer
Although it’s a tough market, being a first-time homebuyer can have its perks — you might be eligible for government-backed or lender programs that can help make your purchase more affordable. Learn how to prepare financially for your mortgage and how to shop for a home.