Buying a home can be an exhilarating experience. You’ll be hunting for your dream home, handpicking the perfect school district, and building generational wealth through real estate. That all sounds amazing, but the process to get there can undeniably have a few stressors.
Some real estate markets are more challenging than others, but a trusted mortgage loan officer can help to make your homeownership dream a reality regardless of the current market environment. That’s where APM has your back.
We know that interest rates are high right now, or at least they’re higher than they have been in recent years. We know that you may be feeling defeated after several years of fierce competition for homes. We know that you’ve done everything right—paying off your debt and credit cards, paying down your student loans, improving your credit score, obtaining that pre-approval letter—only to be boxed out of the market once again over interest rates.
But not on our watch: We want to get you back to house hunting, because in many respects the current housing market is very favorable for buyers. Home prices are stabilizing or falling, there’s far less competition in the market, and many sellers are eager to sell, so now is the perfect time to make your dream home happen for you.
Here are our top four homebuyer hacks to allow you to compete and win in today’s housing market environment.
Homebuyer Hack #1: Buy Now, Refi Later
Refinancing when interest rates drop lower again is an obvious strategy to combat today’s interest rates, if it were not for the fees. APM has solved this problem through our Buy-Fi program, which waives the lender fees typically associated with home refinancing.
Here’s how it works: Simply purchase your home before April 30, 2023, and then refinance with APM before Dec. 31, 2024. When you do that, we’ll waive all the lender fees on the refi, including all the underwriting, processing, application, and credit fees.
This offer applies to rate and term refinances (not cash-out refis), and must meet agency and investor guidelines. To qualify, your previous six mortgage payments must have been paid on time and in full, and your current credit must be approved.
The Buy-Fi program can really take the sting out of today’s current interest rate environment by giving you some light at the end of the tunnel. There’s no reason you should miss out on today’s otherwise favorable real estate market because of high interest rates. With the Buy-Fi program, you can focus on getting into your dream home, and rest assured that we’ll take care of the refinance when market conditions improve!
Homebuyer Hack #2: 3…2…1…Voilà!
Maybe you would rather slash your interest rate and mortgage payment right now without waiting for market conditions to change. APM’s 3-2-1 temporary buydown can do just that—lowering your interest rate by 3 percentage points the first year of your mortgage loan, 2 percentage points the second year, and 1 percentage point the third year, before reverting back to your original interest rate.
This can drastically lower your mortgage payment in the first three years after buying a home, allowing you to replenish your savings in the wake of all the expenses of homeownership, including moving, paying closing costs, and making home repairs.
Here’s an example of how this temporary rate buydown program works in action. Say that you qualify for an interest rate of 6.5%. Using a 3-2-1 buydown means that the interest rate would drop to 3.5% in the first year of your mortgage, rise to 4.5% in year two, and rise to 5.5% in year three. The remainder of your 30-year mortgage term would be at the agreed-upon 6.5% note rate.
Of course, you will always have the option to refinance your mortgage after the temporary buydown ends. Note that these are example rates; to see how this program can help your specific homebuying scenario, talk to your APM loan officer, and they can give you a complete breakdown of your savings using today’s interest rates.
Homebuyer Hack #3: Down Payment Assistance
Many people have come to assume that a 20% down payment is needed when buying a house. This number is typically used as the “standard” down payment, but it’s not really a rule. Even if you don’t qualify for a VA home loan, many first-time homebuyers can still buy a home today with little or no money down.
This is done by leveraging down payment assistance (DPA) programs. Down payment assistance includes gift funds, in other words money that was “gifted” to you by a friend or family member to be used for a down payment; down payment grants from programs like HUD or nonprofits like the National Homebuyers Fund; and down payment assistance loans from government agencies, organizations, or charitable funds. There are many national down payment assistance programs available, as well as state and regional ones.
Your APM loan officer will have the most current information on what is available in the local market where you’re planning to purchase your home, so lean on them to get the latest and greatest down payment assistance!
Homebuyer Hack #4: Credit Score Improvement
Not everyone gets the best published interest rates: To get the lowest rates available today, you still have to qualify for them. That’s why maximizing your credit score is so important before you start house hunting.
You can improve your credit score by making timely payments on all your bills, reviewing your credit report and disputing any inaccuracies you find, paying down your high credit card balances, and abstaining from opening any new credit accounts. You should also avoid closing credit accounts, as the credit bureaus do not like to see a sudden drop in your credit spending power. Finally, it’s a good idea to avoid making any big purchases if you’re planning to buy a home in the next 90 days.
Understanding how your credit score is calculated is crucial to ensuring that yours is as high as it can be. We’ve got you covered there, too: You can read all about how your credit score is calculated in our article here.
Beyond the Homebuyer Hacks
We’ve created these homebuyer hacks to make sure that interest rates don’t cause you to miss out on the otherwise favorable conditions of the current housing market. These four strategies are just the beginning, however. An APM loan officer will be happy to talk to you one on one about your unique financial situation, the current real estate market, and any other ways we can be of assistance when you are buying a home.
Give one of our APM loan officers a call today to learn more.