With the likelihood of rates dropping, preparation and advance planning is key. We’ve collected some key strategies and advice that might apply to your circumstances. Those action steps may look different, depending on your goals. Also, you don’t need to gamble or play “Deal or No Deal” trying to time rates. We’ll show you how to win all the way down.
Planning to Refi
First, we commend you on your courage in buying while prices and rates are up. You are being rewarded for that foresight. Next, as we experienced recently, rates may have one brilliant day, then move back higher. We want to be ready! Here’s what we should do now:
- Determine a strike rate ahead of time. A strike rate is one that benefits you and makes sense to grab. Usually 0.5% to 0.75% lower is good. There is no cost or obligation to lock a loan. We want to be ready to act.
- Focus on a low cost or no cost transaction. We can typically do a new loan every few months. If we can drop the rate without cost then we can ride the waive down without worrying about missing an opportunity. QHL can even sometimes help to cover the cost of the transaction.
- Verify qualifications and that nothing has changed. If something needs to be fixed, like credit score or using 2024 taxes to qualify, we want to identify those challenges well ahead of time.
- Please DO reply to this email to start that conversation if we have not already.
- Avoid gambling or holding out for a “better” deal with your largest obligation.
Hoping to Buy
We believe the competition to buy houses will heat up again. There are some clear actions you should take to help your chances to capitalize on the long-term benefits of buying a home.
- Don’t time your purchase based on rate. Getting the property is likely more important than whatever terms might be available at the time.
- Focus on lower costing loans. Don’t buy rates down. If you can avoid points or upfront charges, you can avoid wasting that money when/if rates drop.
- Do as much work as possible ahead of time to make the strongest offer. This is mostly our part with your cooperation. We want to be in a position to close in 2 weeks if needed.
- Don’t wait to get information and discuss options. It is OK that you are not ready to buy now. Nobody is ever truly “ready” to buy. Owning a home is a learning journey that starts long before you close on the house and continues well after you close escrow (like having a family or a career).