Here’s What Happens When You Repay a Personal Loan Early
You're generally not barred from paying off a personal loan early. But it might cost you. Read on to learn more.
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The decision to sell a home isn’t one to take lightly. This especially holds true if you’ve grown attached to your home and have lived there a long time. As such, you don’t want to rush your decision. But you may not want to put it off much longer, either. Here’s why it could pay to sell your home before 2023 comes to a close.
1. Mortgages could get more expensive
Mortgage rates for 30-year loans have been hovering in the 6% range since the start of 2023. And as of May 11, the average interest rate on a 30-year mortgage was 6.35%, according to Freddie Mac.
Historically speaking, these rates aren’t so unreasonably high. But buyers have already been balking at them since they’re way higher than the rates we saw in 2021 and early 2022. And the last thing you want to do is delay your listing only to see mortgage rates climb from where they are today. If that happens, even more would-be buyers might exit the market.
Also, it may be that you’ll need to sign a mortgage on a new home once you sell your current one. If that’s the case, the longer you wait to sell, the more you risk getting stuck with a higher interest rate on a new loan you sign.
2. Housing inventory is low
As of the end of March, there was only a 2.6-month supply of homes nationwide, according to the National Association of Realtors. That’s well below the six-month supply that’s commonly needed to equalize the housing market.
If you sell your home in the near term, you’ll be selling at a time when there isn’t so much competition. But if you wait, you’ll run the risk of having more homes hit the market, thereby giving buyers more options — and giving you less negotiating power.
3. A recession could drive buyers out of the market
Many financial experts are cautioning consumers to brace for an economic recession during the latter half of 2023. Even the Federal Reserve is saying a recession is likely, albeit a mild one.
If broad economic conditions decline, it could drive more buyers out of the market, either because they’ve already lost their jobs or they’re afraid they’re going to. And if you don’t have as many willing buyers, you might struggle to sell your home. Or, you might end up with a lower sale price than you’d like.
Also, if a recession hits and you lose your job, you might struggle to get approved for a mortgage on a new home. That could make selling your current one quite difficult.
Although the housing market isn’t quite as red-hot as it was a year ago, it’s still a market that’s favorable to sellers. But we don’t know how long that will last. So if you’re serious about selling your home, it at least pays to get the ball rolling by talking to local real estate agents and seeing what your options are.
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