How Buyers Are Still Landing Rates Under 6%
Mortgage rates have climbed above 7%, but not every buyer is paying the rate in the headlines. About 11% of borrowers locked in rates below 6% in late summer, and most of them got there with a few smart strategies rather than luck.
Shop more than one lender
It is the simplest strategy and also the one most often skipped. Borrowers with nearly identical finances can receive offers that are more than half a percentage point apart, so requesting quotes from several lenders at the same time, including a local credit union or a mortgage broker, can give you real room to negotiate.
Look at new construction
Many builders work with preferred or affiliated lenders to offer below-market rates as an incentive, rather than cutting the price of the home. It is worth reading the fine print, though, since some of the lowest advertised rates are temporary buydowns that step up after the first two or three years.
Buy points or consider an ARM
Paying discount points at closing permanently lowers your interest rate, and it tends to make the most sense if you plan to stay in the home for seven years or longer. An adjustable-rate mortgage offers a lower starting rate for the first five to ten years, although the gap between adjustable and fixed rates has narrowed compared to past years.
Ask about an assumable loan
Some FHA, VA, and USDA loans allow a buyer to take over the seller’s existing low rate. You will need to cover the difference between the loan balance and the purchase price, and these opportunities are still relatively rare, but it never hurts to ask.
Ask the seller for a buydown
With the market noticeably cooler this fall, more sellers are willing to put concessions toward lowering a buyer’s interest rate. A permanent buydown can reduce the monthly payment for the life of the loan, and in many cases it does more for a buyer’s budget than a comparable price reduction.
None of these strategies change the broader market, but together they can make a real difference in your monthly payment. For buyers who are ready, a cooler market also means less competition and more room to negotiate.
Whether you are getting ready to buy, comparing loan options, or curious whether a home you love might come with an assumable loan, the right financing strategy matters. If you have questions about which approach fits your situation, reach out anytime. I am always happy to walk you through the numbers!
