For the last three years, potential homebuyers and refinancers have been awaiting lower interest rates like a post-SAT teen hoping to hear back from their favorite college. But unlike anxious students, property buyers have been holding out longer than expected.
The wait may have been in vain, though, because there are several clever hacks to strategically lower your interest rate and get into the real estate market faster.
1. Avoid the Rush With a Midweek Lock-In
When rate shopping, especially for higher mortgage amounts, fine margins make a big difference over time. Locking in an interest rate in the middle of the week, when lender volume is likely at its lowest, as opposed to a Monday, Friday, or the weekend, could help you get the best deal.
“One buyer was able to lock on a Wednesday, after lender volume decreased for midweek, and locked in a rate 0.15% less than the rate they were offered from the previous Monday,” Ben Mizes, real estate agent, investor, and CEO of Clever Real Estate, told MarketWatch. “In this case, the rate difference on a $400,000 loan saved them about $12,000 over the life of the loan.”
2. Consider an Adjustable-Rate Mortgage (Only if it Makes Sense for Your Long-Term Goals)
If your goal is to refinance to a lower rate, choosing an adjustable-rate mortgage can be a little like playing Russian roulette with a fully loaded gun—only to find rates are higher when your ARM expires.
When the cost of refinancing is factored in, ARMs often backfire. However, they can be a good move for investors who don’t plan to hold their property for a long time, such as flippers, BRRRR proponents, or those who intend…