Tag Archives: interest rates rising

More Than: Affording a Home – Complete Guide

30 Monday Mar 2026

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Home shopping can be tough when you’re not sure how much you can afford. If you’ve wanted to live the dream of owning your own home in Jacksonville or anywhere in Florida, but haven’t been sure where to start, we’ve put together a few practical tips that can make it easier to get a handle on your budget and find the right price range. These guidelines help turn the uncertainty into confidence so you can focus on finding a home that fits your lifestyle.

Tax benefits usually mean you can afford more than your rent. Interest deductions on taxes, along with property tax benefits, typically translate into significant savings that renters don’t get. Many first-time buyers find they can comfortably afford about 33% more than their current rent once those tax advantages kick in. To get a quick idea of what this might mean for you, simply multiply your current monthly rent by 1.33. For example, if you’re paying $1,500 in rent, that could translate to a mortgage payment range around $2,000, opening up more options in neighborhoods like Mandarin, Riverside, or the Beaches.

A home price two-to-three times your gross annual income is usually a reasonable place to begin. This is a classic starting point lenders and financial advisors often recommend to keep things sustainable. For example, if your household earned $75,000 last year, you could begin looking in the $150,000 to $225,000 range. In Jacksonville’s current market, this range includes solid starter homes, townhomes, and even some single-family options in growing areas, giving you plenty of choices without stretching too far.

Know how much you can put down. Ideally, you’d want to have 20% of the home’s price set aside for a down payment to avoid private mortgage insurance and secure the best rates. On a $200,000 home, this would be roughly $40,000. While many buyers qualify with less, such as 3% to 5% down through programs like FHA or VA loans popular in Florida, putting down less can result in higher interest rates and monthly payments. The more you can put down upfront, the lower your long-term costs and the more equity you build from day one.

Determine your “debt factor.” Lenders will often cite the 28/41 rule when evaluating your debt load. This means your mortgage payment, including taxes and insurance (often called PITI), shouldn’t exceed 28% of your gross monthly income. Your total debt payments, including credit cards, car loans, student loans, and the mortgage, shouldn’t come to more than 41% of your gross monthly income. For instance, with a $6,000 monthly gross income, aim to keep your housing costs under $1,680 and all debts combined below $2,460. Staying within these guidelines helps ensure your new home feels comfortable rather than burdensome.

We often work with first-time buyers and renters to get themselves lined up for home ownership. If you’d like to learn more, run personalized numbers, or have any questions about getting pre-approved in today’s Jacksonville market, we’re happy to help.

Kevin and Jennifer Hanley, REALTORS The Hanley Home Team Keller Williams Realty Atlantic Partners Southside 904-515-2479 www.HanleyHomeTeam.com

7 Ways for Homebuyers to Deal With Rising Interest Rates

24 Tuesday Jun 2025

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As a Jacksonville buyer in today’s market, it’s understandable to feel hesitant after seeing how fast things moved just a few years ago. Many locals who purchased in 2020–2022 enjoyed quick closings, multiple offers, and homes selling well above asking price. But the market has shifted toward balance, with more homes available, longer days on market, and sellers becoming more flexible. If you’ve been waiting for better conditions, this could be an ideal window to step in before competition heats up again.

Yes, they are still historically low compared to decades past, but that doesn’t change the fact that they’re higher than if you’d bought a house just a couple of years ago. Kind of painful to hear, huh? For context, 30-year fixed mortgage rates hovered around 3% or lower in 2020–2021, but today they’re in the mid-6% range—meaning a $400,000 loan costs hundreds more per month in interest, pushing affordability lower for many Jacksonville buyers.

Interest rates are on the rise.

They’re still historically low.

What you’d probably rather hear is that rates and house prices will come down dramatically in the near future, so just hold on and waiting will pay off. Unfortunately, forecasts suggest rates could stabilize or edge higher in the short term, and while inventory is improving, home prices aren’t poised for a big drop—especially in desirable areas like Jacksonville where demand remains strong.

Clean up your credit. The better your credit is, the better your rate will be. Pull your free credit reports (from AnnualCreditReport.com) and review for errors, high balances, or late payments. Dispute inaccuracies, pay down credit card debt (aim for under 30% utilization), and avoid new credit inquiries. Even a 20–50 point score boost can shave 0.25%–0.5% off your rate, saving thousands over the loan term.

Shop around. Don’t settle for the first quote—compare at least 3–5 lenders (banks, credit unions, online lenders). Use a mortgage broker for broader access. Watch for hidden fees; a “great” rate with high closing costs can cost more overall. Local Jacksonville credit unions or community banks often offer competitive rates and personalized service for residents.

Buy discount points. Pay upfront “points” (1 point = 1% of loan amount) to permanently lower your rate—typically 0.25% reduction per point. For a $400,000 loan, one point costs $4,000 but might drop your rate from 6.5% to 6.25%, saving ~$60/month. Great if staying 7+ years; calculate break-even (usually 3–5 years) with your lender.

Lock in your rate. Rates can fluctuate daily—lock when you’re under contract (usually 30–60 days). Ask about costs (often free or low) and a “float-down” option: if rates drop before closing, you get the lower rate. This protects against rises while allowing benefit from declines.

Get an adjustable rate mortgage (ARM). ARMs start with lower rates (e.g., 5/1 ARM at 5.5% vs. 6.5% fixed) for an initial period (5, 7, or 10 years), then adjust annually. Ideal if you plan to sell or refinance before the fixed period ends—perfect for short-term owners or those expecting rates to fall.

Pay biweekly. Split your monthly payment in half and pay every two weeks—results in 26 half-payments (13 full) per year, knocking years off the loan and tens of thousands in interest.

Refinance when rates go down. Monitor rates closely; if they drop 0.5%–1%+, refinancing can lower payments significantly. Factor in closing costs (2–5% of loan) and break-even time.

So, even if rates aren’t as low as the recent past, you still have real options and control over your interest costs. Use one or a mix of these strategies to save money and make homeownership more affordable in today’s market.

Let’s strategize together on the best path for your situation—whether buying now, waiting, or optimizing financing.

Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 www.HanleyHomeTeam.com

The New Rules for Buying a Home in Today’s Market

14 Thursday Sep 2023

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In today’s hyper-competitive market, the old rules for buying a home don’t always apply.

So what, exactly, are the new rules, and how can you leverage them to buy your dream home?

A recent article from realtor.com outlined the rules you need to follow if you want to successfully buy a home in today’s market, including:

  • Prepare for a marathon. Finding a home in today’s market is a marathon, not a sprint. Thanks to low inventory, you can’t go into your home search expecting to find and buy your dream home in a few weeks; instead, expect the process to take three to six months — or, in certain markets, up to a year.
  • Don’t lowball your offer. With so much competition in the market, lowball offers are quickly discarded. If you find a home you love, make sure you do everything you can to make your offer as competitive as possible, including offering at or above the asking price.
  • Move fast. Again, the current real estate market is extremely competitive, and that means things move fast. Many homes are listed on a Friday, host an open house or two on the weekend, and then review offers on Monday. If you want to successfully purchase a home in today’s market, you need to be willing to move fast and, in many cases, make an offer immediately upon seeing a home.

Work with experienced agents like us to help you come out on top in this fast-changing real estate market. Kevin and Jennifer Hanley, REALTORs, The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside HanleyHomeTeam.com 904-515-2479

3 Reasons Why the Fed Raising Interest Rates Is Good for Home Buyers

28 Thursday Jul 2022

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If you’re either in the process of buying a house, or thinking of jumping into the market, you’re probably well aware that rates have jumped significantly in recent weeks. And that likely doesn’t feel or sound like anything good to you. 

But what you might not be well aware of is that, according to Chair of the Federal Reserve, Jerome Powell, raising interest rates is actually being done (at least in part) for the good of home buyers. 

With rates nearly double what they were not too long ago, you may be wondering where on earth the silver lining is. This Fortune article keys in on three things Powell is hoping the Fed’s actions will do for real estate buyers. Here’s a quick summary and how it can help you in your home search:

  • They hope it gives you a “bit of a reset” – In short, there hasn’t been enough listings, and there are too many active buyers for the amount of available inventory. Ultimately, that is what led to bidding wars and prices continuing to rise. They’re hoping that by raising the rates, it will help raise inventory levels and price some buyers out of the market, giving buyers who continue with their search for a home more time and options to choose from.
  • Potentially lower prices – Powell didn’t come right out and say that he hoped prices would fall, or that they definitely would. In fact, he basically said he’s not sure if it’ll affect them at all, but that they’re keeping an eye on how it affects prices. The issue is still that there are not enough houses for sale. In order for prices to come down, there needs to be an uptick in inventory. If you read between the lines, it sounds more like they’re hoping that “overvalued” markets will correct, but other areas will plateau or only see mild increases for some time, as opposed to the steep increases in value we’ve been seeing. So, this isn’t a promise, and it will likely depend a lot on your local market conditions. Keep in mind that they’ll also be sensitive to protecting the values and equity of homeowners to avoid causing homeowners financial issues or the inability to maintain or sell their house. It’s a balancing act, which is likely why he sounds a bit vague and says they’ll be watching it carefully.
  • They want mortgage rates to fall – Powell just wants to get inflation under control, and calm down the real estate market so that prices don’t get too out of whack with incomes. Once that’s done, he wants to see rates drop again. Now that won’t be in the next few weeks or months. In fact, it could take a couple of years before you see that happen.

The Takeaway:

While this certainly isn’t great news for every buyer in the market, it can be for you. The rate hikes will edge some buyers out of the market, but those who are qualified and in a position to buy at the higher rates will ideally benefit from lower competition and more homes to choose from at a less frenzied pace. 

Prices may not take a steep dive, which some buyers may be hoping for, but that can be a good thing if you already own a home anyway, and want to use the equity you’ve gained by using it to buy a bigger home, or downsize and pocket some of your gains. 

On the other hand, if you are hoping for prices to fall, they will at least likely stop rising so much and so fast, and may even take a dip if your market is overvalued. So there is hope for that. Just be ready and in a position to pounce if they do, because inventory is still low, and competition is always fierce for well-priced houses, regardless of what rates are doing.

And lastly, even if you buy at a higher mortgage rate right now, know that the Fed wants to lower rates in the near future, so you can always refinance when they do.

So, even though it may not seem like the Fed raising rates is a good thing for you, it can be if you understand what they’re trying to do and are in a position to take advantage of the lower competition and increased inventory they’re hoping to create by doing so. Let’s discuss your next step – Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside HanleyHomeTeam.com 904-515-2479

Affording a Home

16 Thursday Mar 2017

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20120705160210440496000000-oHome shopping can be tough when you’re not sure how much you can afford. If you’ve wanted to live the dream of owning your own home, but haven’t been sure where to start, we’ve put together a few tips that can make it easier to get a handle on where to start.

1. Tax benefits usually mean you can afford more than your rent. Interest deductions on taxes typically translate into significant savings. Many people find they can afford about 33% more than their current rent. To get an idea of what this might be for you, multiply your current rent by 1.33.

2. A home price two-to-three times your gross income is usually a reasonable place to begin. For example, if your household made $75,000 last year, you could begin looking in the $150,000 – $225,000 range to start.

3. Know how much you can put down. Ideally, you’d want to have 20% of the home’s price set aside for a down payment. On a $200,000 home, this would be roughly $40,000. While people qualify with less, it can result in higher interest rates (which translate to higher monthly payments).

4. Determine your “debt factor.” Lenders will often cite the 28/41 rule when it comes to your debt. This means that your mortgage (plus taxes and insurance) shouldn’t exceed 28% of your gross monthly income. Your total payments (credit card, car loan, etc.) plus your mortgage shouldn’t come to more than 41% of your gross monthly income.

We often work with first-time buyers and renters to get themselves lined up for home ownership. If you’d like to learn more, or have questions, we’re happy to help.  Kevin and Jennifer Hanley, REALTORS, The Hanley Home Team – http://www.HanleyHomeTeam.com 904-515-2479

Homebuyers need to act now

04 Wednesday Feb 2015

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CHICAGO – Feb. 4, 2015 – Homebuyers need to move fast if they want to spend less, according to Jonathan Smoke, chief economist at realtor.com.

“Delayed purchases will only result in higher monthly mortgage payments as prices and rates rise,” Smoke writes. Realtor.com forecasts that affordability may decline as much as 10 percent over the year.

The Federal Reserve continues to remind the financial markets that it plans to raise its target federal funds rate this year, which will cause mortgage rates to rise. Many economists predict that 30-year fixed-rate mortgages will average near 5 percent by the end of the year.

For now, mortgage rates are near historical lows for homebuyers and homeowners. Freddie Mac reported last week that the 30-year fixed-rate mortgage averaged 3.66 percent (last year at this time it averaged 4.32 percent), and 15-year fixed-rate mortgages averaged 2.98 percent (a year ago, it averaged 3.40 percent).

“Right now, the Fed is using the word ‘patient’ to describe its approach to picking the time to raise the target rate,” Smoke notes. “However, when the Fed ‘loses patience,’ rates will go up at least 20 to 40 basis points in anticipation of the target rate officially going up. … So, buyers beware: The clock on these low mortgage rates may be ticking.”

Source: “2015: Buy Now, Before the Fed’s Patience Ends,” realtor.com® (Jan. 30, 2015)

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