Do you want to move but are tied to a low mortgage rate?

MINNEAPOLIS — Average mortgage rates have been at historic lows for more than a decade.

But as anyone looking to buy a home knows, he’s bounced back in the last year.

So what do you do when you have one of those low interest rates but want to make a difference?

1. Consider renovations

Can you adapt your current home to meet your changing needs? If necessary, research home equity loans and find the best interest rate.

2. Remember that you can refinance

Sometimes you just have to move. But remember, your new home loan may be higher, but that doesn’t mean it has to stay that way.

“If interest rates go down, you have an opportunity to refinance later. And if they go even higher, you’ll be glad you signed up at this point,” said Jerry Moscowitz, president of Minneapolis-area real estate agents.

3. Change your perspective

Here’s the thing about those higher mortgage rates – historically, they’re not that high.

Freddie Mac lists average mortgage rates since 1971. Look at that date and you’ll see that today’s average rate of 6.6% on a 30-year fixed-rate mortgage doesn’t look too bad compared to decades past.

Moscowitz stressed that the period of low interest rates we just came out of is not normal. He says for those who need to buy, waiting for those low rates to come back might not be the best idea.

“I think there’s a danger of waiting and thinking you’re going to go back to those rates. I don’t think that’s going to happen,” he said. “If you need to move and you’re financially able, I think you should do it and not wait and see what happens.”

According to Moscowitz, the Twin Cities still struggle with a shortage of affordable housing for both buyers and renters.

The lack of housing is at least partly due to homeowners choosing to stay put because they are locked in at a low price.


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