As mortgage rates surge, securing a lower rate may seem out of reach—especially in the 5 percent range. Fortunately, there are a few options for homebuyers looking to eke out a favorable rate.The average rate for a 30-year mortgage reached a six-month high last week at 6.91 percent, according to Freddie Mac—less-than-stellar news for those looking to purchase a home in the near future.Just a year ago, the 30-year fixed-rate mortgage had an average rate of 6.62 percent.
While a sub-5 percent mortgage rate may not be possible through traditional means, Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage, told Newsweek a rate in the 5s may be achievable through a temporary mortgage rate buydown—particularly a 2-1 buydown.According to DeFlorio, this '...will reduce the note rate for the first two years of the mortgage and is paid for by a seller or real estate agent credit.'Interestingly, an October 2024 survey from Zillow found that 45 percent of homebuyers who purchased a house within the last year reported having a mortgage rate under 5 percent. Further, the survey found the most common method of securing a rate under 5 percent was special-rate home financing offered by the builder or seller, followed by 'making their offer contingent on a rate buydown.'Hannah Jones, senior research analyst at Realtor.com, told Newsweek that working to improve your credit score and shopping around for mortgage rates with different lenders can help you secure a lower rate.'...a recent study found that rate shopping can save borrowers up to 150 basis points, which could get them closer to a low-to-mid 5% rate,' said Jones.Further, DeFlorio advised potential homebuyers to ensure their credit is excellent and credit card utilization is low (experts suggest lower than 30 percent) to maintain a favorable debt-to-income rati
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