GALLATIN & NASHVILLE, Tenn. (WTVF) — If you're looking to buy a home, you're likely watching interest rates to see how much your money can buy.
After 20 years in real estate, Deanne Nelson has seen trends come and go.
She's noticed a trend among some buyers this summer: waiting for an interest rate drop.
"When they realize that just that little bit can make a difference, yes, I do think that they wait," said Deanne Nelson, a realtor and owner of New Key Realty.
Nelson said first-time home buyers will be most impacted by a lower interest rate, as a slight change can make the house payment fit their monthly budget.
If you're thinking about buying, Nelson recommends making sure you have documentation for your income, debt, proof of assets, your housing history, and more ready to give to your bank.
"You're going to feel like they ask you for the kitchen sink, but just give it to them, because that's what factors in to help you get the best plan," Nelson said.
Click here for detailed information on the items you need to present to qualify for a mortgage.
This preparation becomes especially important if rates drop, attracting more home buyers and suddenly making the market more friendly to sellers.
However, according to mortgage lenders, a rate cut at the Fed doesn’t directly correlate to lower mortgage rates, and that rate is tied to the bond market.
Which begs the question, is it worth the wait to try to get that lower rate?
I heard from the folks with Community Mortgage Advisors in East Nashville about this issue.
Branch Managers Forrest Hewes and Kenneth Troope said it may not be for everyone.
"When the rates do come down, you'll see these prices on the houses will start to sort of come up as well in accordance with that," said Hewes.
As surprising as this might seem, some may be better off buying before a rate cut if you can possibly swing it.
"When your interest rates are where they are right now, it gives the buyer a lot more bargaining power when they are going in and making an offer," Troope said.
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Do you have more information about this story? You can email me at robb.coles@newschannel5.com.
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