How Smart Homebuyers Get Mortgage Rates Under 6%
Written by
Laura Bogart
Edited by
Cory Dudak
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Not so long ago, mortgage rates were at or below three percent. Unfortunately, rates have risen and homebuyers are confronted with high rates–in fact, finding a mortgage with under 6.5 percent interest can be a challenge.
However, smart homebuyers don’t have to be deterred by a difficult market. Not when homebuilders around the U.S. are incentivizing buyers by offering to reduce mortgage rates.
Mortgage Rate Buydowns
According to NASDAQ, some builders are using a tactic referred to as “mortgage rate buydowns,” which involves buying points from the mortgage lender. Those builders agree to pay an upfront fee, which will allow them to lower the interest rate on a loan, sometimes permanently.
In some instances, builders can get mortgage rates reduced down to the six percent range. It’s a mutually beneficial arrangement that allows buyers to find brand-new dream homes at more affordable prices while enabling homebuilders to sell their inventory.
To learn more about the builders making these offers, contact local realtors and ask for recommendations.
Assuming a Mortgage
Should we be more attached to the idea of buying a home with a history, there are still ways of getting reduced mortgage rates.
Money.com explains that you can assume the mortgage of a home you want to buy–meaning that we essentially take over the existing mortgage, paying it off based on the current terms and rates. But this option doesn’t come without some purse strings attached: You’ll need to have enough funds to cover the seller’s total home equity (i.e. the price sans the balance of the mortgage).
While loan assumptions aren’t always allowed for all mortgage types, they can be allowed for government-backed loans, such as VA, USDA, and FHA mortgages.
Compare Lenders
You can also go directly to the mortgage lenders. Taking the time to investigate different lenders could yield several potential price quotes, giving us more options to consider.
Be careful not to limit your search to similar kinds of lenders. If you expand our contacts to include online lenders, banks, and credit unions, you might find more affordable rates. As nonprofit organizations, credit unions are generally able to offer more competitive terms. Exploring any loyalty programs available to us through your current banks might also help you find lower mortgage rates.
Thanks!
While mortgage rates don’t seem like they’ll be going down any time soon, finding a rate that comes in under six percent isn’t a total fantasy. With some planning, research and legwork, you can find a mortgage rate that will help us put the keys to your new homes right in your hands.
