Mortgage mistakes to avoid once interest rates are cut

Homebuyers patiently waiting for a break with mortgage interest rates don’t have to wait much longer. Not only have rates fallen by more than a point from where they were at the end of 2023, but they will drop further in the weeks and months ahead if the Federal Reserve proceeds with an expected series of rate cuts. This will be welcome news for all types of borrowers, but specifically those looking for mortgages. After all, mortgage rates have increased exponentially from where they were in 2020 and 2021 and they hit their highest level since 2000 last summer. So any reprieve will be helpful, particularly as home prices continue to tick upward.

Like any financial product, however, homebuyers will need to take a nuanced and strategic approach when applying for a mortgage. And this is particularly true in the face of as many as three potential cuts to the federal funds rate this year. While there are multiple ways to prepare for mortgage interest rate cuts, there are also some easy-to-make mistakes that should be avoided. Below, we’ll break down three of them.

 

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