Qualifying for a mortgage is becoming more difficult due to higher interest rates. Roughly 4 percent of housing contracts fall through for various reasons, with one of the most common being financing. But right now, even more buyers are having difficulty getting the homes they want because the new interest rates are putting them out of reach.
Let’s learn more about the increasing interest rates, how they’re making it harder to qualify for a mortgage and what to do if your buyer’s financing falls through.
What Are the Current Mortgage Rates in Nevada?
At the time of this writing, the current average rate for a 30-year fixed mortgage is around 7 percent. National rates are around 7.08 percent. Rates are increasing by the day. The Federal Reserve is aggressively increasing interest rates to slow the economy down.
This year, the Feds raised interest rates 200 basis points, or 2 percent, with the goal of slowing down inflation. Higher interest rates discourage people from borrowing money because it will cost them more. As a result, fewer people purchase goods, leading to less demand. This slows business growth, share prices and the economy as a whole.
While high interest rates go along with high inflation, this isn’t the news people in the housing market want to hear. If you were hoping to sell your Las Vegas property quickly, you may not be able to right now.
How Mortgage Rates Affect Home Buyers
Mortgage interest rates have a major impact on the home buying experience. First, higher rates will increase mortgage costs. Looking strictly at interest rates, Experian reports that a 2 percent rise in interest rates adds $115 to your monthly payment for every $100,000 of a 30-year home loan.
Not only are the high interest rates putting some homes out of reach, but also buyers are finding it harder to qualify for a loan. Higher rates make qualifying more difficult because of lender requirements for how high your monthly payments can be relative to your income.
Typically, lenders follow the 28/36 rule. Your housing costs (mortgage interest, mortgage principal, taxes and insurance) can’t exceed 28 percent of your income. Your total debts, including housing, can’t be more than 36 percent. While there are some exceptions, you’ll generally want to stay below these numbers.
My Buyer’s Financing Fell Through. Now What?
If you waited a long time to receive an offer and now it fell through, there’s no question that you’re feeling frustrated. So do you wait and risk the same thing happening again? Or do you take a different route?
There is no right answer for everyone. It depends on how quickly you need to sell your property and what you hope to make off it. But if you’re looking for a quick sale and a decent offer, you can consider a cash sale.
We Buy Any Vegas House will pay cash for your house in Las Vegas. We have our own money, which means we don’t need to borrow any from the banks! This allows the process to move quickly, and there are no contingencies to stand in your way. You can expect a quick sale and a clean close in just a couple of weeks.
To get your free cash offer on your Las Vegas property, contact We Buy Any Vegas House today.