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Home Buying Strategy In 2024

March 4, 2024

FHA Home Loans

In the first week of March 2024, mortgage rates were hovering at near the 7% range. Some financial pundits believe this could extend into April. A housing recovery is supposed to be possible in 2024, but there has been slow progress, not overnight changes.

In recent weeks (at press time) we find fixed-rate mortgages have been in the mid-to-high 6% range (30-year fixed rate conventional mortgages) and while those numbers are expected to drop “sometime” in 2024, some borrowers are unable to wait and see.

What are these house hunters to do when applying for a loan with a higher mortgage loan interest rate?

Buy With A Plan To Refinance

Some borrowers apply for loans with an eye on a refinance loan later, and some don’t. If you apply for an adjustable-rate mortgage, you are likely already considering the refinance process.

But borrowers with a fixed-rate mortgage and no plans to sell may also wish to consider the benefits fo refinancing later after buying at a higher mortgage rate.

A borrower anticipating refinancing can build that into the early stages of planning their purchase loan. This is something borrowers are likely not to regret doing. Why is this step so important?

Refinancing Requires Planning, Too 

Any time you buy a home or refinance a mortgage, you’re applying for a major line of credit.

Borrowers need a full year or 12 months of on-time payments on all financial obligations to get the best results from your application. In addition, borrowers must find cash for closing costs, and all borrowers should lower their debt ratios.

Working on credit and preparing for a loan application takes time. And it takes just as much time to work on credit for a refi loan as it does for a purchase loan unless you already have good credit habits you’ve been using along the way.

When applying for any big line of credit, financial discipline is key.

Those planning a FHA purchase loan who know in advance they need to have that discipline again it will affect your spending and saving habits in the interim.

After buying a house, some will purchase a new car or other major purchases after closing day.

But knowing there is yet another credit check and approval process to get through may affect those choices.

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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