Buyers Can Save on Their Mortgage

By
Real Estate Agent with Keller Williams Realty

Currently mortgage rates are in the 7% rate range.  Buyers are feeling a financial squeeze and need to find a solution so they can purchase a home. Many are predicting mortgage rates will begin to fall soon and some home buyers have adjusted to current interest rates and home prices. Still many cities are experiencing home affordability issues. One way for home buyers to fight home price increases is to have a great credit score.  This will allow them to get the lowest interest rate at that time therefore lowering monthly mortgage payment.  Following is a list of other techniques that may help lower interest rates:

Visit several mortgage lenders - Get mortgage quotes from multiple lenders.  Different lenders have different programs, and some of these programs may improve your buying power.  Homes buyers should compare interest rates, terms, and additional fees not just the mortgage rate. When shopping around, visit mortgage bankers, regional banks, credit unions, and national banks.

Negotiate – Be sure to negotiate on interest rates, and fees charged by lenders.  Lenders often have some flexibility in negotiations because it is important to keep the business.  It never hurts to ask, the worst that can happen the lender tells you no.  If you ask you may be surprised how often you improve your position.

Mortgage point buy down – Buying down mortgage points is a way to reduce your interest rate on a loan.  This means paying more up front in closing cost.  This is a fee charged by the lender on your loan to reduce your interest rate on your loan and lowers the overall amount of interest paid on the mortgage.  Have the lender calculate the break-even point to determine how long you must stay in your home to justify paying this upfront cost.

Discounts – If you are an existing customer with banks and credit unions ask for discounts.  Some will wave processing fees or reduce closing costs providing you maintain minimum balance and/or have certain types of accounts.

Lock-in mortgage rate – Some mortgage lenders allow buyers to take advantage of lower interest rates that occur between time you complete the loan application and closing date. Always negotiate with the lender for reduced interest rate.

Mortgage terms – Discuss with multiple lenders the different terms they have that may best fit your situation.  Different lenders have different mortgage packages that offer different terms.  This is an important step when you start house hunting and do this before you start serious house hunting.     

Comments (1)

Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

John, glad there is a buydown option for buyers, almost makes homes affordable.

Nov 28, 2023 10:37 AM