I keep hearing potential buyers tell me that they are waiting until the rates get better and the truth is you will be missing out. If you are looking at buying a house here are a few tricks you can use to secure a rate you may be able to afford.
Yes the times of 2% and 3 % interest rates are gone and they won't be back for a while. This means that your payment on a 5% or 6% loan will be higher. Simple math. The reason the rates are higher is to slow down the purchasing. In other words there are less buyers. This means that the days of sellers getting 5+ offers are also a thing of the past.
As a buyer in this new market you have options. With brings me to this phrase of "Date the rate and marry the house." It means exactly what you think. The rate of your loan will change for nearly 97% of home buyers throughout the life of their loan. The address will not. This means that if you ever wanted to be in a certain city or on a certain street then this is your chance. I have had multiple buyers and sellers in the last 3 months offer and request credits at the time of purchase. These credits can range from a fixed dollar amount such as 5k$ or 3% of the price offered.
Here is an example of a recent deal. Buyer offers $600k for a home and asks the seller to credit them 3% of the purchase price for non recurring closing cost and to "buy down" the loan. We took the $18,000 credit and used them to pay off a considerable amount of the closing cost and the remainder went to purchasing the loan rate from nearly 7% to 5%. Now the clients are in a neighborhood they never could have imagined they could have afforded with a 30 year fixed loan at 5%. They will eventually refinance as nearly most people do in the next 3-5 years but if for some reason they are that 3% that don't then they are good with a payment and in their forever home.
This is a simple idea and works on some properties that fit a criteria. If you or anyone you know is looking to move or buy please feel free to send them my referral and I'd love to fill them in on the details of what and how I look for these certain properties. Thanks
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