01/15/2025
DID you KNOW you could get a permanent under 6% mortgage rate?
Reach out to Jason Pughe with Guaranteed Rate 407-448-7987 and then contact me and let’s start your home search!
PSA: You can buy a pre-existing home right now with a rate in the 5's on a Conventional, FHA, or VA loan.
No it's not a temporary buydown, a permanent buydown for the life of the loan.
No it's not a new construction home, and yes new construction builders have incentives that allow you to do this as well.
New construction homes aren't for everyone. A large inventory of pre-existing homes are currently on the market and you can still get seller concessions in this market to help achieve your goals. I just looked at our team's 2024 production and out of the 105 loans that we closed, over 53% of them had seller concessions to buy the rate down. With average rates largely over 7% in 2024, we had 16 families close with rates in the 5's, 1 family in the 4's, 20 families in the low 6's, and 19 families in the mid 6's. We currently have two families under contract right now in the low 5's.
Did you know that on a 400k home w/5% down you could see around a $125 difference in monthly payment with buying the rate down half a point, and around $250 in buying it down a point. Many people have talked about "dating the rate and marrying the house", that's a great strategy if rates drop soon. For what it's worth, many were posting about that strategy almost two years ago and many are probably still dating the rate. What if you had a chance to marry the house and marry the rate and possibly never have to worry about refinancing down the road? Many lenders say they can do a no cost refi, there are still closing costs on a refinance and those get rolled into the loan. A lender might choose to not have any lending fees, but there are still title fees, potentially setting up a new escrow account, and other things that could see your loan balance potentially climbing up $10,000 and you potentially could've just negotiated seller concessions to buy your rate down enough to not have to do this down the road.
Homes are sitting on the market, this is the time where you can take advantage of asking for seller concessions. When rates are lower, the buyer pool and demand will multiply, which then puts the seller at an advantage and less likely to be willing to negotiate. You can also use seller concessions to bring down your cash that you have to bring to closing. You can choose to use all for closing costs, or a combination of using for closing costs and buying the rate down, or if monthly payment is your biggest concern then using it all for the permanent rate buydown.
I'm not saying every home is willing to give seller concessions. I'm also not saying that every buyer's situation warrants needing/wanting to get seller concessions. What I am saying is that if you are concerned about monthly payment, there are ways to accomplish the goals that you have in this market despite the average rate being over 7% right now. Who you work with matters, is your current lender discussing your goals and where you need to be at monthly and cash to close wise? Is your realtor partnered with you and your lender on this to help structure the right offer for you to WIN in today's market? I wish I could say that everyone does this, they don't. Reach out to our team, this is arguably the biggest financial decision of your life, and we want to help you achieve your goals not only now but for the future. If you don't have a realtor, we can refer you to the one's that we saw do this in 2024, and continue to see them do this today.
