As of now, the mortgage rates are still consumer friendly. But knowing how the economy works, or at least how everything works, what went down can also rise back up. The economy is expected to rebound again in 2016 and expensive mortgages can rise once more.
Here are some steps you can take to make sure that you are prepared for the rise of mortgage rates:
1.Save Up
If you are currently enjoying low mortgage rates, it would only make sense that you can save up a lot of cash now. Take advantage of this low interest payments and save as much cash as you can. So that if interest rates do rise, you are sure to be able to weather that storm.
2. Pay A Larger Amount For Your Principal
Another step you can take to avoid higher costs is to pay for your principal amount now. When rates go up, your total interest may go up too. But if you pay for your principal now, or at least a large portion of it, you can save yourself from a bigger debt when the economy drops. So do consider paying for your principal now, as it would be easier to pay for your interest if your principal debt is already smaller.
3. Fixed Rate Mortgage
The best way to take advantage of the current low mortgage rates is to go for a fixed rate mortgage. Lock in your low interest rate so you'll pay less interest over the course of your mortgage. This also means that you would know when you are going to fully pay your loan.
4. Move To A Smaller Home
If you are currently staying in a house that is a too big for your household, it may be smart to consider downsizing. It may be stressful to move out and move in, but it will also mean that your mortgage will be smaller and more flexible. It will also allow for lower utility bills and less chances for repairs. This will definitely allow you to save up a good amount, not only for the predicted higher rates, but also for you to have as much extra cash as possible.
