Hi Reader,

Mortgage rates have been doing their best impression of a horror movie protagonist running roughshod in a frantic pattern.

Oh, the drama. The average top-tier 30-year fixed rate is 7.50% today, according to Mortgage News Daily, after touching 7.20% a week ago. Freddie Mac's weekly average moved up to 7.03% from 6.95% the prior week.

So yes, rates are higher.

But, does that mean that you missed the boat on homeownership? No.

There are plenty of ways to alleviate the higher rates which I am going to outline in this email.

And, I'm going to be teaching them live in my new Homeownering Zoom, two weeks from today on:

Tuesday, October 13th at 6:30pm.

​Sign up here if you want to get notified with details for the webinar:

"NYC & Beyond: The First-Time Homebuyer Playbook for Today’s Market"

Ok, now on to some winning strategies for these higher rates.

1. Novel mortgage products

Lenders are coming to the rescue with novel products to address the rate increase. My favorite? The lender-paid 1-0 buydown.

What the heck is a "lender-paid 1-0 buydown, you might ask? Well it's a jargon-y mortgage term which basically means that your first year is a full percentage point lower than the standard rate which the lender pays for.

​This video outlines this strategy:

Feel free to email me directly if you have questions. I've done two of these loans lately for clients and they were thrilled to have 12 months of rates in the 5s or low 6s in order to ease into homeownership.

2. Sometimes the "expensive" loan is actually cheaper

FHA loans often get a bad rap. Yes, they have extra fees (upfront mortgage insurance adds 1.75% to your loan amount + mortgage insurance that is paid monthly).

FHA loans also run at least half a percentage point lower than conventional loans. I just priced out an FHA vs. Conventional for a Cash-Out refinance and the pricing was a full point better for FHA.

But one thing I have learned is that people's individual circumstances are personal. And with this recent client, an FHA fit the bill.

Why? Because this couple was interested in, first and foremost, the smallest amount of money leaving their account each month.

Doesn't that resonate? It does with me. Who hasn't ever felt the impact of every dollar leaving their account each month?

If you know my history, you know that I built my career on software tools that provide transparency and today is no different. Here's an analysis I did of the FHA loan vs. conventional:

FHA comes with additional mortgage insurance costs, including an upfront mortgage insurance premium that is generally 1.75% of the base loan amount, plus ongoing monthly mortgage insurance.

But depending on how much cash you need, how long you expect to keep the loan, your credit profile and what you're trying to accomplish with the money, the lower rate can make the math surprisingly compelling.

Mortgage rule #1: Don't choose a loan by staring at one number.

Run the whole equation.

3.Waiting for rates to fall has a price, too

If there's one thing we can say with certainty is that one part of the US housing market doesn't necessarily resemble another.

Here's how different the price landscape looks:

In August, home prices were still rising year over year in some of the country's most supply-constrained markets. Median existing-home prices were up 4.3% in the Northeast and 3.3% in the Midwest. Meanwhile, the West was down slightly.

That creates two very different buyer strategies.

In an appreciating market, waiting six or twelve months for the perfect mortgage rate can mean paying more for the actual house.

A lot of people sat out the market last year thinking rates wouldn't get better. We don't know where rates will go next, so often getting in the market before home prices increase further is the best bet.

4. Some markets, though, are "counter balancing" with seller credits

In a market where prices are softening, the opposite can happen: a lower purchase price may offset some, or even all, of the impact of a higher mortgage rate.

Seller credits are back on the table. Redfin did a big analysis of them. Check out how common they are now:

Seller concessions can be used for all sorts of things, including buying down the mortgage rate for a year or two and paying for part of a buyer's closing costs, or even home improvements.

While seller concessions are more common in Sun Belt areas, they are rising in popularity in areas in the Northeast and Philadelphia.

5. I look for money under the couch cushions

There are lender credits. Pricing incentives. Temporary buydowns. Credit-score thresholds. Product changes. Refinance structures.

Sometimes a few points on your credit score can change your mortgage pricing enough to put real money back in your pocket at closing.

​Here's an example of where I saved my client $7,500 at the closing table just by monitoring their credit score:

My job isn't simply to give you an interest rate.

It's to watch all of those moving pieces and figure out where the advantages are.

And one more big piece of news...

The company I'm brokered under is now licensed in all 50 states.

Which means my map just got considerably bigger.

Buying in New York? Great.

Moving to Pennsylvania? I can help.

Deciding you've had enough of winter and heading to Florida? Also me. Same with California and Texas.

Moving somewhere I previously would have had to hand you off? Not anymore.

So wherever you're thinking about buying, refinancing or figuring out what your options actually look like, reach out.

The mortgage market may be complicated. Your mortgage strategy doesn't have to be.

Happy Homeownering!

Love,

Nicole

nicole@homeownering.com

(917)650-0167

NMLS #2354049

If you're a new subscriber, welcome! Here's info about me. If you want to be in touch more, you can find me on Instagram where I post at least once a week, and also Facebook, YouTube and LinkedIn. If you have any homeownership questions, just hit reply to this email and I'll be glad to help.

I ❤️ mortgages, so you don't have to!