Blog Post 35: How to lower your Interest Rate
Blog Post 35: How to Lower your Interest Rate
How to lower your interest rate:
A seller concession is when your offer on a home is coupled with the request to receive a percent back to cover either your closing costs and/or lender fees.
Typically, we can as for 3% seller concession for the buyer. What this does is gives the buyer upfront cash to lower their interest rate or out of pocket expenses.
The seller will favor this more if the offer price on the home has this 3% “cash back” amount in mind. If you offer significantly under asking AND request a seller concession, the sellers are less likely to provide for your out of pocket expenses.
A lot of time, buyers will do this and consider it as rolling those out of pocket expenses into their monthly mortgage payment instead of draining their cash reserves.
Interest Rates:
According to Forbes adviser, the average APR rose on a 30-year fixed mortgage today, inching up to 6.74% from 6.70%. At the same time, the 15-year fixed mortgage APR is 6.03%, higher than it was yesterday. Last week, it was 5.77%. Rates are quoted as APR.
The average APR on the 30-year fixed-rate jumbo mortgage is 6.78%. The average APR on a 5/1 ARM sits at 7.55%. Last week, the average APR on a 5/1 ARM was 7.38%.
Experts are forecasting that the 30-year, fixed-mortgage rate will stay within the 5% to 6% range in later 2023, though some predict it might get higher. The average 30-year, fixed-rate mortgage was 6.12% as of February 9, according to Freddie Mac.
Your Options are:
Your Options are:
1. Wait and see if interest rates drop while you keep renting. (Tampa’s average rent is $2000 per month)
2. Buy at the current interest rate to take advantage of the market we’re in now, realizing your monthly rent will now be going toward a principal pay down to own an asset.
3. Refinance if and when rates drop.
Some Interest rate math to consider..
Some Interest rate math to consider..
On a $450,000 loan, the difference in monthly interest payments between a 6% rate and a 5% rate is $282. The difference between 5% and 4% is $262.
The truth is, some people are toiling away to save for a downpayment while paying upwards of $27,000 per year in rent. There are many home loan programs that allow for extremely low down payments. I’m talking 3.5%.
The truth is..
The truth is..
The truth is, some people are toiling away to save for a downpayment while paying upwards of $27,000 per year in rent. There are many home loan programs that allow for extremely low down payments. I’m talking 3.5%.
The truth is..
The truth is..
The truth is, some people are waiting for rates to drop while spending upwards of $2200 per month on rent. When it could be worth temporarily spending an extra $300 per month in interest to have your monthly rent go toward something you’ll actually own. If it’s feasible for you, of course!
The Truth is..
The Truth is..
The truth is, everyone’s situation is different. It’s important to evaluate your current financial position in correlation with your living situation. For many, now could be a really good time to buy to beat everyone who will enter the market the second rates drop. For many others, it’s smart to wait it out and see what is going to happen in the coming months.
What's your stance?
What's your stance?
We’re here to discuss your personal situation and work with our reputable lenders to give you the facts and help evaluate if now is a good time for you to buy or wait!
For more information check out Blog Post 33: First Time Home Buyer: Buying a home is a big and exciting step, but it’s also a complex process that requires careful consideration and planning. By following these tips and working with a team of professionals, you can make your dream of homeownership achievable.
It is our hope you’ll trust us with the assignment of helping you find your next home!
