Dubai:>Prospective homebuyers who have been priced out of the market by rising interest rates are taking steps to be ready if, as some predict, rates fall in the near future. A recent survey revealed how these sidelined individuals are strategizing for a potential return to the housing market.
The survey found that a significant portion, nearly half (44%), are considering locking in a long-term fixed-rate mortgage, specifically with terms of four or five years. This approach would provide them with predictability in their monthly payments, even if rates were to fluctuate again in the future.
However, not all potential buyers are shying away from adjustable-rate mortgages (ARMs). A smaller, but still notable, group (22%) expressed interest in this option, which typically offers a lower initial interest rate compared to fixed-rate mortgages. This strategy carries the risk of higher payments if rates rise, but can be beneficial if rates decrease as anticipated.
The remaining portion of the surveyed group (12%) opted for a shorter-term fixed-rate mortgage, potentially aiming to secure a lower rate in the near future and then refinance into a longer-term product once rates stabilize. This approach offers flexibility but requires careful monitoring of market conditions and potential refinancing costs.
Beyond choosing a mortgage product, the survey also highlighted other steps these hopeful buyers are taking to improve their chances of success in the market. Many are focused on improving their credit scores, which can lead to better interest rates and loan terms. Additionally, some are saving aggressively for a larger down payment, which can not only make them more competitive but also reduce their overall loan amount and monthly payment.
While the potential for rate cuts offers a glimmer of hope for sidelined homebuyers, it's important to remember that market conditions remain complex. Experts advise individuals to carefully consider their financial situation, risk tolerance, and long-term goals when making any decisions related to homeownership. Consulting with a qualified financial advisor can be crucial in navigating the complexities of the mortgage market and making informed choices aligned with individual circumstances.