Higher Interest Rates Are the New Normal—What Are Your Options as a Buyer?

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Let’s talk about mortgage rates. If you’ve been holding off on buying a home, waiting for them to drop, you might be waiting longer than expected. That’s why it’s important to know that people are still buying homes right now —and so can you! 

The key is knowing how to navigate the current market and make smart moves that put you in the best position. Here are four tips on how you can regain control, buy with more confidence and still get a home you can afford.

1. Get Your Finances in Shape

Preparation is everything. Before you start house hunting, take a close look at:

  • Your budget – Higher rates mean higher monthly payments, so knowing what you can comfortably afford is key. A good rule of thumb: Keep your housing costs under 28% of your gross income and your total debts below 36%.
  • Your down payment – The more you can put down, the lower your loan amount and interest costs. If 20% isn’t realistic, don’t stress—there are loan options that require less.
  • Your credit score – A better score can qualify you for lower rates. If yours needs work, focus on paying down debt and making timely payments before applying for a mortgage.

The stronger your financial foundation, the more negotiating power you’ll have.

2. Don’t Overpay—Negotiate with the Seller

With some homes sitting on the market longer, sellers are motivated to make deals happen. This gives you opportunities to:

  • Ask for seller-paid closing costs – Instead of paying thousands upfront, you can negotiate to have the seller cover part (or all) of your closing costs.
  • Negotiate a rate buy-down – Some sellers will pay to lower your mortgage rate temporarily, reducing your monthly payment for the first 1–2 years.
  • Look for price reductions – If a home has been listed for a while, the seller may be open to dropping the price.

You don’t have to go in at full price—use today’s market conditions to your advantage. Your Realtor can be a valuable resource in helping you identify these opportunities. 

3. Explore Alternate Loan Options 

Not all mortgages are the same. If you’re looking for ways to make homeownership more affordable, consider:

  • FHA Loans – Lower credit score requirements and just 3.5% down.
  • VA Loans – No down payment if you’re a qualifying veteran or active-duty service member.
  • USDA Loans – No down payment for homes in select rural and suburban areas if you meet certain income requirements. 
  • Seller financing (a.k.a Seller Carryback) – Ask the seller to finance the deal instead of a traditional lender and then refinance down the road when rates go down.
  • Land Contract – Similar to seller financing, but is an ongoing purchase with the seller, who remains on the title until paid in full. When rates go down, you can refinance and take fee simple ownership from the seller.
  • Hard Money Loan – A short-term loan from a private lender that allows you to act as a cash buyer, which is more attractive to sellers. With hard money loans, you’re not subject to lender underwriters, and you can get the money right away.
  • Other less traditional options include mortgage assumptions and “subject to purchases” where you take over the seller’s current loan.

Ask lenders what programs they offer to help you get the best interest rate and/or reduced closing costs. You may even qualify for down payment assistance grants from the lender!

  • Need to reduce upfront costs? Ask if the lender can roll some of the closing costs into your loan to bring less cash to closing.
  • Want a lower monthly payment? See if you can buy down the interest rate by paying more upfront.

There’s a loan option out there that can work for your situation—you just need to find the right fit.

4. Buy Now, Refinance Later

The biggest mistake buyers make? Waiting for the “perfect” rate. If you find the right home at a price you can afford, it’s worth buying now—especially since you can always refinance later when rates drop.

Instead of waiting and potentially getting priced out, focus on locking in the best terms possible today and improving them in the future.

Get Expert Guidance to Make Your Move

Buying a home in today’s market can feel overwhelming—but you don’t have to do it alone. At Expert Title Escrow Agency LLC, we work with buyers, sellers and real estate professionals every day to make sure deals close smoothly and on time.

Want expert advice on navigating today’s market? Our team is happy to meet with you and your Realtor to discuss strategies that help buyers succeed.

Contact us today to schedule a meeting!