Date: June 14, 2023

When you purchase a home, what do people normally ask? “What interest rate did you get?” 

I find it funny how this is normalized; however, it’s not normal to ask someone, “How much is your mortgage payment?” 

This tells us that the only thing we’ve been taught to ask is, “What’s your best rate?”. Normally I’m not a fan of this conversation because there is so much more to a conversation than just a rate. 

However, in a rate-increasing market, getting your mortgage rate locked in is crucial as it can be the difference between qualifying for the home you love and not. 

Therefore, let’s talk about understanding the impact of rising mortgage rates. 

  1. Increased Cost of Borrowing: Mortgage rates directly affect the cost of borrowing money to finance a home purchase. Even a slight increase in interest rates can have a significant impact on your monthly mortgage payments and the overall amount you pay over the life of the loan. Locking in a pre-approval now allows you to secure a lower interest rate, potentially saving you thousands of dollars over the course of your mortgage.
  2. Reduced Purchasing Power: As mortgage rates rise, your purchasing power decreases. Higher interest rates mean higher monthly payments, which may limit the price range of homes you can afford. By obtaining a pre-approval now, you can take advantage of the current rates and maximize your purchasing power before it diminishes.
  3. Market Volatility and Uncertainty: The real estate market is subject to fluctuations, influenced by various economic and global factors. Rising mortgage rates can create market uncertainty, leading to increased volatility. By obtaining a pre-approval, you can secure your financing options and protect yourself from potential rate increases in the future.

Benefits of locking into a pre-approval

  1. Rate Protection: When you secure a pre-approval, you typically lock in an interest rate for a specific period, usually 120 days. This ensures that even if rates rise during that time, you will still receive the lower rate you were pre-approved for. Rate protection provides peace of mind, enabling you to plan your finances with more certainty.
  2. Increased Negotiating Power: A pre-approval letter demonstrates to sellers that you are a serious buyer with your financing in order. It gives you an edge in negotiations and can help you stand out among other potential buyers who have not yet obtained a pre-approval. In a competitive market, having a pre-approval can make a significant difference in securing your dream home.
  3. Faster Closing Process: Since the pre-approval process involves gathering and submitting the necessary documentation, such as income verification and credit checks, you can save valuable time when it comes to finalizing your mortgage. With a pre-approval in hand, you are one step closer to closing on your home, allowing for a smoother and quicker transaction.

In a rising mortgage rate environment, securing a pre-approval becomes crucial for prospective homebuyers. By locking into a pre-approval now, you can take advantage of lower interest rates, protect yourself from future rate increases, and increase your purchasing power. Additionally, a pre-approval provides you with a competitive advantage in negotiations and expedites the closing process.

Remember, mortgage rates are unpredictable, and timing is key. Act now to secure your pre-approval and position yourself for success in the current real estate market.

Mortgages can be complicated; we are here to help you make “cents” of it.

We focus on Mortgage Solutions, Period!

To learn more connect with Ana Cruz 905.870.0513 or email at