Interest rates have recently languished at record lows for quite a while, but as everyone knows, they can't stay there forever. Already, interest rates have inched above their bottoms and, with each Fed announcement, the onus of rising rates on the horizon seems closer every day.

Chances are if you've been living in your home for a number of years without refinancing, your current interest is higher than today's rate. All this points to a golden opportunity to better manage your biggest investment, your home, although it's an opportunity that's quickly slipping away. Here's what to do, and do fast, before interest rates rise again.



Upsize or Downsize

One option is to take this chance to change homes entirely. If you've outgrown your home, or your home has outgrown you, you can make use of this prime opportunity to sell your current home and buy a bigger or smaller one at a better rate.

For many homeowners or prospective homebuyers, these low rates coincide with certain other powerful motives to upsize or downsize their residences. Specifically, the rise in people working from home and the health and safety concerns of living in congested urban environments since the onset of the COVID pandemic has led many to rethink their living situations.



Refinance

If you're not ready to move yet or are perfectly happy staying put, you can still take advantage of these unprecedentedly low interest rates before they balloon back upward. If you've been paying your monthly mortgage payments on time, you're already in a strong position to get yourself a better rate. Barring any credit issues, your credit score has likely even gone up since you secured the original mortgage, placing you in an even better negotiating position.

You can start by trying to negotiate with your existing lender for a better rate. You may also benefit from shopping around for an even better rate from a different lender.



Purchasing Power

Whether you're looking at changing homes or just mortgages, doing so now, while interest rates are still near their record lows, can give you a great deal more purchasing power than waiting. The slightest change in your interest rate can have a profound impact on your monthly payment and overall cost of your home.

Consider the value of home you can purchase for an approximate $1,200 monthly payment depending on the interest rate you get:

• 3.75% interest - $270,000 home
• 3.25% interest - $285,000 home
• 2.75% interest - $300,000 home

In this example, every half-percent drop in interest rate adds $15,000 to your purchasing power.



Recap

A lower interest rate means you pay less in interest, and therefore overall, for your home. It can even get you a lower monthly payment. A lower interest rate means you can get "more house" for "less money," and it means you could garner more for selling your home, while buyers are clamoring to secure a mortgage at these rates before they rise. To discuss your options further, speak with a Realtor or real estate agent at any of the fine real estate companies in Baton Rouge.