Don't lose sleep over rising mortgage rates

Don't lose sleep over rising mortgage rates
Mortgage rates have been going up since May. They're now at the highest level in more than a year.

While home buyers never like to see rates go up, Greg McBride, senior financial analyst at Bankrate.com says don't lose sleep over it.

"A bigger issue for home buyers right now is the limited inventory on the market and the fact that these bidders' wars that result from that are driving prices up," McBride says.

"That's really having a much bigger impact on affordability than the half-percentage point increase we've seen in mortgage rates. Mortgage rates are still very low. We just got spoiled by the fact that we were below four percent for the past year."

McBride says if you have good credit and you're willing to shop around for a loan, you can still find rates lower than 4 percent.

"Do more than just look at the interest rate, you also want to look at the costs that are involved, in particular, those out-of-pocket costs. Comparison shop both of those data points and focus on what's known as the APR, the Annualized Percentage Rate.

"That's really the true cost of that credit. It incorporates both the interest rate as well as those out-of-pocket costs."

For more information

Bankrate: Are 4 percent mortgage rates the new norm?

Rising mortgage rates elicit fears they could hurt housing recovery

Mortgage Rates Are Rising: Do Home Buyers Need to Act Fast?