Here are two ways buyers can combat increasing mortgage rates.

The market has gone insane recently due to rising interest rates. The increases make it harder for buyers to purchase homes, so what can you do if you want to make a move this year? Fortunately, I have two ways you can combat rising rates:

1. Use a lock-and-shop program. Good, qualified local lenders, like the one we’re partnered with, allow you to lock in your rate for a certain amount of time. Normally, you need to be under contract to lock in an interest rate. With this program, you can lock in a favorable rate for 90 days. If you lock in a rate of 5.5% but they increase to 6%, you can still use that 5.5% rate. However, if you lock in a rate of 5.5% and rates decrease to 5%, you can move down to get the more attractive rate. 

“Sellers may be willing to pay for your 2-1 buydown. ”

2. Use a 2-1 buydown. Think of this as deferred interest. For the first 12 months of a loan at 5.5%, you’ll only pay a 3.5% rate. In year two, you’ll pay 4.5%. For the rest of the loan, you’ll pay the 5.5% rate just like you would have anyways. This frees up cash upfront, so you can use that money to start a business, save for uncertain times, or do anything else. A 2-1 buydown is a fantastic option; plus, my team has been able to negotiate with sellers to have them pay the initial cost for you. 

If you have questions about either of these options, please call or email me. I am always willing to help!