Some homebuyers face 'payment shock.' Here are mortgage-saving tips.

By The Exchange Team

Despite indicators of a slowing property market, homebuyers face high prices and interest rates.

Mortgage News Daily reports that the average 30-year fixed-rate mortgage rate is 6.7%, up from 3.3% in 2022.

In addition, according to Realtor.com, property prices — the median is $435,000 — are up 13.1% on average from a year ago.

Consider an Adjustable rate mortgage. ARMs have a lower initial rate than fixed-rate mortgages.

1. An ARM could be a short-term answer

A shorter loan with a better rate may be preferable to a 30-year mortgage. A 15-year loan currently averages 6%.

2. 15-year mortgages reduce interest.

First-time homebuyers with limited means may qualify for federal programs that cut down payments and closing expenses.

3. First-time homebuyer programs can help with costs

Lease- or rent-to-own contracts may make sense. A percentage of the monthly rent is often put into an escrow account until the day of purchase.

4. Sometimes rent-to-own works.