(ATLANTA, Ga.) — Interest rates keep going up, up, up, making it very expensive to borrow money to buy a house or car.
Channel 2 consumer advisor Clark Howard says there is a silver lining for people who need to borrow money to make a big purchase.
If you’re looking to buy a house or car right now, interest rates can look pretty scary, but there still may be a deal out there that works for you.
Chara Fedke said her dog Lux was ready for a yard, and after her rent went up nearly 10%, she was ready to make the jump to becoming a homeowner.
“I just bought my first house. I’ve been renting all my life and so this is my very first house,” Fedke said.
But things got a little scary when home prices and interest rates started climbing.
“I was saving up for a down payment, but then house prices skyrocketed. And that money I had saved was not even half of what a 20% down would be,” Fedke said.
Fedke’s realtor, Kiffany Garner, said it may not be as bad as we think.
“These are not the highest interest rates we’ve ever seen. And I think we got a little bit spoiled when we had the 3% interest rates,” Garner said.
Garner told Howard that buyers were making scary decisions when interest rates were low, like waiving inspections and paying over the asking price. Now that home sales are slowing down because of those higher interest rates, buyers have more power.
“We’ve been able to negotiate closing costs. We’ve been able to negotiate repairs. And there’s also less competition,” Garner said.
She helped Fedke find a great home in Forsyth County, and a great deal on a mortgage with a Community Reinvestment Act home loan with 100% financing and no mortgage insurance.
“I’m very excited. I’m glad I’m doing this,” Fedke said.
Howard said shopping around for a mortgage is extra important with higher rates. And the same thing is true when you’re shopping for a car.
Drivers we spoke with say low inventory and high prices mean they’re waiting to buy a car.
“My husband wants me to get a new used car because my car’s 14 years old,” said Betty Londergan.
“It’s not just the price of the car. You can’t get one anyway,” car buyer Tish Anshen said.
Howard said we’re seeing some improvement in new car sales. It varies by make and model, but we’re about halfway back to pre-pandemic inventory numbers and some cars are selling below manufacturer-suggested retail price.
But if you don’t absolutely need a car, Howard said don’t buy one.
“Oh, I’m definitely holding on to mine,” Londergan said.
Whether you’re financing a car or a home, Howard said to shop for that loan before you even take a test drive or attend an open house — especially for a mortgage.
There are state and federal programs out there designed to help first-time buyers and people in certain income brackets.
Most programs require participating in financial education classes or flexibility on where you’re looking to buy.