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3 smart things homebuyers can do in today's market

Even with higher mortgage rates there are some things homebuyers can do in today's market. Getty Images

After months of cooling, inflation ticked back up in July, giving some economists pause. With interest rates meant to combat inflation at a 22-year high and rates on mortgages the highest they've been since 2002, it feels like homebuyers have run out of viable options. 

With experts divided on the short-term future of the mortgage rate environment, many prospective buyers may instead decide to wait on the sidelines for rates to improve. That, however, could be a mistake and could even lead to you losing your potential dream home in the process.

While the record-low mortgage rates of 2020 and 2021 are unlikely to return anytime soon, there are still some things buyers can do now to put themselves in the best position. These smart moves will help buyers reduce costs and save money both now and over the duration of a potential mortgage loan.

Start by exploring your mortgage rate options here today to see what rate you qualify for.

3 smart things homebuyers can do in today's market

Even with higher interest rates and lower housing inventory, there are still some smart moves homebuyers can make today. Here are three to know now.

Shop around for lenders

As with most financial products and services, buyers should shop around for mortgage lenders before committing to one. See what rates and terms are available from at least three different lenders, although you could explore more than that, too. While rates are heavily influenced by the Federal Reserve, there may be some slightly better terms and conditions with one lender than the other. But you won't know what's available until you've done your research and shopped around.

That said, you'll want to do your shopping within a relatively tight time window; otherwise, you could risk damaging your credit score with multiple hard credit checks. And since your credit score is one of the key factors reviewed when applying for a mortgage, you'll need to do your best to keep it as pristine as possible.

Start shopping mortgage lenders here now to learn more.

Lock in the best rate you find

After you feel confident that you've done an adequate amount of research and have found the best lender and rate for you, don't be afraid to lock it in place. The current rate environment is volatile and hard to predict. As such, what appears to be an elevated rate today could be a moderate one in the days to come — and a low one over the next few weeks and months.

Timing the mortgage rate environment is an almost impossible task. So if you lock a rate now and the market improves, you can always get a lower one before closing — or a lower one in the future by refinancing. But if you don't lock it in, and rates go higher, you'll essentially be paying more for less. Don't make this mistake. Secure a good rate when you find it and then hope you can get it even lower in the future.

Monitor the rate environment closely

Mortgage and mortgage refinance rates change daily. And while those changes aren't always dramatic, every point (and a tenth of a point) matters, particularly when considering the 30-year mortgage term the average buyer needs. Monitor the rate environment closely, then. This is true for those who have yet to secure a rate, as they can potentially get a better one each day. But it's also true for those who have locked in a rate but are hoping for a better one or those who have already closed but are considering refinancing. 

You won't know what you can potentially get unless you're keeping an eye on the broader economy and the mortgage rate environment, specifically. So monitor it closely — it could save you significant sums of money when rates inevitably improve.

Learn more about your mortgage rate options here now.

The bottom line

While home borrowing is the most expensive it's been in years, buyers can still be smart about how they approach the process. This includes shopping around to find the lender with the best rates and terms. But it also means being willing to lock in a favorable rate when it's found — and not waiting around for a perfect time to secure it. Finally, buyers should remain vigilant and continue to monitor the overall rate environment, even during the closing process and after they've moved in, as it could change quickly and in a more favorable direction. 

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