Find out how you can buy a home today without waiting for interest rates to drop. Effective strategies for smart buyers.

Many people are waiting for mortgage rates to drop before buying a home. But will that really happen? According to recent projections, experts say rates will decrease, but not as much as many people hope. The good news is that even if rates don't drop substantially, there are still ways to make buying a home more affordable.

How Much Will Rates Drop?

A few months ago, experts predicted mortgage rates could fall below 6% by the end of the year. But recent projections suggest that may not happen. While rates are still expected to decrease slightly by the end of the year, projections from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo now show that rates will stabilize around 6.5% by year-end.

This means that if you’re holding off on buying a home in hopes of much lower mortgage rates, you might be waiting for a while. And if you need to move due to something in your life changing, like a new job, a baby, or a marriage, waiting that long may not be an option.

Creative Financing Options in Today’s Market

Since mortgage rates are not expected to drop as much as initially predicted, it may be worth considering alternative financing options that could help you buy a home sooner rather than later. Here are three strategies to discuss with your lender to see if any of these make sense for you:

1. Mortgage Buydowns

A mortgage buydown allows you to pay an upfront fee to lower your mortgage rate for a set period of time. This can be especially helpful if you want or need a lower monthly payment early on. In fact, 27% of agents say first-time homebuyers are increasingly requesting buydowns from sellers in order to buy a home right now.

2. Adjustable-Rate Mortgages (ARMs)

Adjustable-rate mortgages (ARMs) typically start with a lower mortgage rate than a traditional 30-year fixed mortgage. This makes them an attractive option, especially if you expect rates to drop in the coming years or plan to refinance later.

And if you remember the housing crash, know that today's ARMs aren’t like the risky ones back then. Lance Lambert, Co-Founder of ResiClub, helps drive this point home by saying:

. . . ARM products today are different from many of the products issued in the mid-2000s. Before 2008, lenders often approved ARMs based on borrowers' ability to pay the initial lower interest rates. And sometimes they didn’t even check that (remember Ninja loans). Today, adjustable-rate borrowers qualify based on their ability to cover a higher monthly payment, not just the initial lower payment.

Lance Lambert, Co-Founder of ResiClub

3. Assumable Mortgages

An assumable mortgage allows you to take over the seller’s existing loan, including its lower mortgage rate. And with more than 11 million homes qualifying for this option according to U.S. News, it’s worth exploring if you want or need a better rate.

Bottom Line

Waiting for a big decline in mortgage rates may not be the best strategy. Instead, options like buydowns, ARMs, or assumable mortgages could make homeownership more affordable right now. Connect with a local lender to explore what works for you.

If you have questions about how to take advantage of these options or need help finding your dream home, feel free to contact me and I'll guide you through the process!