It wasn’t that long ago when mortgage rates had reached all-time lows. While those days are gone for the time being, it doesn’t necessarily mean you should hold off on buying a home. You still have to consider your personal and financial circumstances to ensure that you make the right decision.

Here are some points to consider when deciding if now is the right time to buy a home.

1. The rate you qualify for

Don’t assume that you know what mortgage rate you’ll qualify for. Contact two or three lenders for a pre-approval. This will clearly define how much money you can borrow and at what rate. You may find that you qualify for a rate that’s lower than the industry average. But again, there’s no way of knowing until you take action. 

2. Your housing budget

Your interest rate will affect your monthly payment. It’ll also affect how much you pay in interest over the life of your loan. However, it’s not the only thing that should drive your buying decision. Knowing your housing budget allows you to adjust your approach accordingly. You may not be able to spend as much money as you could have when rates were low, and that’s okay. The key now is to set a budget and continue your search with this number in mind. 

3. Your down payment

Generally speaking, a larger down payment corresponds with a lower interest rate. How much lower depends on the amount of your down payment, your credit score, and the lender you choose. 

If possible, a down payment of 20 percent should be your target. Not only does it help you secure the lowest possible rate, but it also allows you to avoid private mortgage insurance (PMI).

4. Associated expenses 

There are other housing expenses that have nothing to do with your mortgage rate. This includes things such as taxes, insurance, and homeowners association fees. These aren’t impacted directly by your mortgage rate, but they’ll come into play when calculating your monthly obligation.

These details should help you decide if it’s a good idea to buy a home when mortgage rates are high. If this isn’t enough information to guide you, here are some additional questions to answer:

• What is your current mortgage rate?
• Have you considered both a fixed rate and adjustable rate mortgage?
• Can you hold off on your purchase until you save a larger down payment?
• What is your current living situation?

In a perfect world, you’d find yourself in the market for a new home when rates are hovering around all-time lows. But as you know, things don’t always work out this way. If you’re currently in the market for a mortgage, consider all these details among any others that are important to you.

What is your mortgage rate? Are you happy with it? Could you have done anything to secure a lower rate?