Good news! Mortgage rates are going down, and there are ways you can get a lower rate, even in this more expensive interest rate environment.
Last month my husband and I bought a $300,000 investment property and our builder offered us a 5.9% interest rate, even though we were getting a non-owner-occupied loan. Rates would normally have been above 7% for us, but the seller paid extra money to the lender to buy down our rate, and made the monthly payments more affordable.
We saved about $200/month, and it cost the builder about $10,000 to buy down the rate. If we don’t sell or refinance within the first 4 years, this investment into a lower interest rate will have paid off.
If you want to keep your house payments lower, you can ask your seller to do the same thing. If you have room to negotiate on the property you’re buying, instead of a price reduction, you can ask for an interest rate “buy down” – this will help you keep your monthly payments lower.
Alternatively, you can buy-down the rate yourself to make the home something you can afford comfortably for the long term.
For every 100,000 you spend, a 1% difference in mortgage will save you about $65 per month… Whether saving that money makes a significant difference to you will depend on your particular situation, so let’s run the numbers together and see what the best opportunities are for you this year.