Mortgage

What if mortgage rates don’t fall? 3 things buyers can do this spring

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While waiting for rates to fall homebuyers should consider taking some smart steps this spring.

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By the spring of 2024, many homebuyers had expected an adjustment to the mortgage rate climate. With inflation significantly cooling toward the end of 2023 — and the prospect of rate cuts courtesy of the Federal Reserve high — many were optimistic that this spring homebuying season would be better than last. Unfortunately, that relief has yet to come and maybe more delayed than expected. 

With the most recent inflation report showing a rise and the prospect of a drop in this week’s report uncertain, some homebuyers may want to start thinking about their next steps should rates remain where they are. And with one Fed official recently discussing keeping rates untouched, it may be worth considering those next steps right now. Below, we’ll break down three things homebuyers can do this spring if mortgage rates don’t fall as expected.

Start by exploring your mortgage rate options here to determine your eligibility.

3 things buyers can do this spring if mortgage rates don’t fall

Here are three steps homebuyers should consider taking this season while waiting for rates to fall.

Boost your credit score

While waiting for the rate environment to improve, buyers should do all they can to make sure that their buyer profile has improved during this time. This means reducing debts, not applying for new credit and doing what you can to boost your credit score as much as possible. Remember that the lowest mortgage rates and best terms will be held for those with the cleanest profiles. So if you’re already waiting anyway, it makes sense to improve your credit so that you can more easily lock in a low rate when they do eventually fall.

See what mortgage rate you could get here now.

Consider all alternatives

While you may have anticipated applying for a conventional, 30-year mortgage loan you may not have accounted for today’s rates. With them being as high as they currently are, then, it could be valuable to explore alternative ways to get them lower. This can involve paying a lender directly to secure a lower rate (mortgage points) or forgoing the security of a long-term rate by pursuing a lower, short-term one instead (an adjustable-rate mortgage). And, for some, it may be worth investigating the benefits of a 15-year mortgage instead, if the goal is to secure the lowest rate while paying off the new home as soon as possible.

Act anyway

Sure, today’s mortgage rates aren’t ideal, but they’re not abnormally high, either. In recent decades, mortgage interest rates have often been in the double digits, making today’s average 6.99% rate for a 30-year loan relatively cheap. And if waiting for a rate drop means having to pass on the dream home that was recently listed, you should seriously consider moving now. That home may never be listed again, but rates are cyclical and they will come down at some point, at which time you can refinance to the new, lower going rate.

The bottom line

While mortgage rate cuts haven’t come in the first few months of 2024, there’s no saying what could happen in the remaining nine months of this year. While waiting for a positive development, however, buyers should do all they can to boost their credit score and improve their financial attractiveness as a buyer. And they should strongly consider alternative ways — like adjustable-rate mortgages and mortgage points — to secure a lower rate. Finally, for some buyers, it may be worth acting anyway if the alternative means losing out on a rare homebuying opportunity.

Have more questions about the homebuying process this spring? Learn more about your mortgage options online today.


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