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Homebuyers Consider Alternative Loan Options Amidst Tariffs
Rising mortgage rates have more buyers eyeing adjustable-rate mortgages (ARMs) for their lower initial costs. ARM applications have jumped to 9.6%, the highest since 2023. Recent tariffs have contributed to this shift and added nearly $11,000 to the cost of building a new home, pushing prices and inflation even higher.
ARMs can offer some upfront relief, but it’s only temporary as rates increase depending on the type of ARM you get. That’s why it’s important to look at your long-term plans and financial stability before diving in. With fewer buyers in some areas, there may be room to negotiate or explore markets that were once out of reach. Knowledge is power in today’s market. If you want to discuss and navigate these changes, we can find the loan strategy that works best for you.1
Create Fiscal Stability from the Ground Up
With inflation, stock market ups and downs, and talk of a possible recession, it’s easy to feel uneasy, especially if you’re thinking about retirement. But instead of reacting out of fear, think about building your finances like a well-structured house. First, you need a strong foundation. This is your reliable income. This might come from things like pensions or high-yield savings accounts. Next, you add the walls. Solid, lower-risk investments like Certificates of Deposit (CDs). These help shield you from the big ups and downs of the market while still offering some growth. Finally, top it all off with a roof. Growth investments like stocks and ETFs (Exchange-Traded Funds are bundles of stocks, bonds, or other assets all rolled into one). These carry more risk, but they also have the potential to grow your wealth over time. When your “fiscal house” is balanced, you’re better prepared for market storms, and more confident about the future. Planning ahead with the right strategy can give you peace of mind, no matter what the economy brings. 2
Did You Know?
One type of mortgage that’s becoming popular again: the adjustable-rate mortgage, or ARM. The percentage of buyers opting for an ARM has risen to just under 10%, which is the highest since November 2023. Buyers of more expensive properties who require larger loan amounts are especially interested in ARMs this month, as they feature a starter rate that’s lower than the interest rate for a fixed-rate loan.3
Pre-Approval Isn’t Commitment – It’s Clarity
Even if buying a home is more of a “someday” goal than a “right now” plan, getting pre-approved early can be a game-changer. Think of it as doing a little homework upfront so you’re ready when the time is right. Pre-approval helps you understand what you can actually afford—no more guessing or daydreaming about homes that might be out of reach. We will take a look at your finances and give you a clear number to work with. That clarity helps you plan smarter and avoid surprises. And if you happen to stumble across the perfect home? You’ll be ready to make a move, while others are still scrambling to get their paperwork in. It’s a simple step now that could save you a lot of stress later! 4
What Happens When You Make One Extra Mortgage Payment a Year?
Buying a home is a major milestone! No more rent, the freedom to make it your own, and with a fixed-rate mortgage, your monthly payment stays the same. But here’s something many homeowners don’t think about: making just one extra mortgage payment a year can make a big difference. That single payment, applied to your principal, helps reduce the interest you pay over time, builds equity faster, and could even cut years off your loan. For example, on a $500K mortgage at 6%, one extra yearly payment could save you over $85K in interest! Some homeowners make biweekly payments to reach that goal more easily. It’s totally optional, but if your budget allows, this small move could lead to big savings. Just check in with me first to discuss if it’s a good option for you.5
Sources: 1 cnbc.com; 2 kiplinger.com; 3 cnbc.com; 4 keepingcurrentmatters.com; 5 rwmloans.com
