Buying a home is easy
Contact Joe Moore

When you buy a house it is a choice of major significance. One that is supposed to last you a lifetime or at least the next 30 years or so. The mortgage payment shouldn’t be viewed as a burden. But as something that will give you a stable residence in this wild, volatile world. 

However, it’s not easy to become a homeowner. As interest rates skyrocket, it can become even more difficult to do.

So, how can you safely become a homeowner as mortgage rates skyrocket? Find out in this guide.

How To Handle Record High Rates To Become a Homeowner

If you’re planning to buy a home, the competitive housing market is making it harder than ever to qualify for a mortgage. But there are ways to make sure you have all your bases covered before you apply for a loan.


Here are some tips from experts on how to safely become a homeowner as rates skyrocket:

1. Find a Good Rate

Call your real estate agent or lender and ask about current mortgage rates if you’re ready to buy a home. Don’t just take their word for it. Get several quotes from different lenders before deciding on one who will help you finance your purchase. 


You can also use this Mortgage Calculator tool provided by the National Association of Realtors to estimate what kind of monthly payment you’ll be able to afford based on different down payments and interest rates.

2. Boost Your Credit Score

To qualify for low mortgage rates, you need a good credit score. Lenders use your credit score to determine whether or not they’ll lend you money. How much will they charge you in interest payments over time?


The best way to improve your credit score is by paying off debt and avoiding new lines of credit before applying for a mortgage. You should also check your report regularly for errors that can lower your score. They may include an old collection account that you should have removed from your file and dispute them immediately with the credit bureaus if necessary.


3. Go Big With a Bigger Down Payment

The more money you put down upfront, the less risk you face from rising interest rates or economic changes. The Federal Housing Administration (FHA) recommends putting at least 3% down, which is often easier than done when saving up for your dream home.¹ 


However, if you can afford to put more than 20% down on your house, it will protect you against future rate increases and give you more flexibility when it comes time to refinance your loan.


4. Don’t Rely on Credit Cards for Down Payments.


It can be tempting to use credit cards or take out cash advances on your credit card to help with the down payment on your new home. However, it’s best not to use credit cards when financing a home purchase. 


You may pay higher interest rates and other fees if you have high balances on multiple credit cards throughout your loan.

5. Don’t Pay Too Much for Points or Fees


Many first-time homebuyers don’t realize that closing costs — like origination fees, appraisal, and inspection fees — can add up quickly when buying a home. Find out all closing costs in advance when shopping for a mortgage. Ensure there are no surprises later on when it comes time to close the deal on your house purchase. 


6. Create a Plan To Save

The first step to buying a home is to create a plan for how much you can afford.² It includes not just mortgage payments but also homeowner’s insurance, property taxes, maintenance, and other expenses. Many people get tripped up because they don’t know how much they can afford.


Credit Score Tips When Interest Rates Are High

If you haven’t already done so, make sure that your credit score and history are good. You can pay off delinquent bills or outstanding credit card balances before applying for a mortgage. You should also check with the three major credit bureaus (Equifax, TransUnion, and Experian) to see any errors or mistakes on your credit report that could be holding back your ability to qualify for a loan.


Next, calculate what it will cost per month to own a home based on your current budget and savings levels. The following are some things to consider when figuring out what you can realistically spend each month:


“About Mountain West Financial and the CalPATH Home Loan Program

Mountain West Financial is the exclusive lender offering CalPATH, the #1 home loan program for Teachers, Police Officers, Firefighters, and other public employees who serve our local California communities.

You may contact our CalPATH Hotline @ 800-310-7577, seven days a week from (8:30 am to 8:00 pm) or visit our website @ A CalPATH advisor will be standing by to answer (any & all) questions you may have about the home buying or refinance process.

We look forward to working with you soon!


Joe Moore

CalPATH Division Manager

NMLS #333648″

Links to sources used:

  1. How big should your down payment be?
  2. How to set a budget for buying your first home.