Are you looking to save thousands on your mortgage in Miami, even during a time when mortgage rates are at their highest in over 23 years? If so, you’ve come to the right place. In this blog, we’ll unveil eight powerful tactics to help you save thousands on your mortgage, even in a market where rates are soaring to unprecedented heights. Whether you’re a first-time buyer, a seasoned homeowner, or simply exploring the Miami market, these proven strategies will empower you to make informed decisions and secure the best rates available. Let’s dive into the art of mortgage savings!
Now, the first tip on our list revolves around your closing date. When you are buying a house, your mortgage rate lock is like a golden promise from your lender. In simple words, your lender will be committing to honor a specific mortgage rate, and it comes with a price tag – a guaranteed fee – for a set period. Well, you can save money by choosing a smarter closing date. You see, mortgage lenders play a numbers game. They like shorter timelines. So, if you can tighten up your closing date, you’re in for a treat. In general, lenders tend to bump up the interest rate by 0.125 percentage points for every extra 15 days in a rate lock. Now, 30 days helps you get the lower rates and if you are stuck with a 90-day rate lock, you’re looking at the highest rates. Another important thing to keep in mind is that you need to aim for closing dates in 15-day windows. Go for 30 days instead of thirty-one, or 45 days instead of forty-six.
If you are buying your first home ever, you definitely need to look into first-time home buyer mortgage programs. There are government as well as community mortgage programs for first-time homebuyers that offer lower interest rates, cash grants for closing costs, and even forgivable loans for down payments. Now, there are some programs that are brought to you by your state and municipal governments. These programs should be your priority. However, there are federal programs in the mix too. I would recommend that you get yourself pre-approved and see if you’re eligible for these first-time home buyer programs. You could consult your real estate agent to connect you with the right person. In fact, since November 6th, 2023 Florida Housing has approved the additional allocation of 36 million dollars to the Florida Hometown Heroes program! If you remember, last time they approved a total of $100M on July 1st, 2023 and the funds ran out in weeks. These funds are available now and yes, are expected to be gone within weeks so schedule a Discovery Call with me to see if you qualify.
When it comes to securing a mortgage, your credit score plays a pivotal role. The higher your credit score, the more attractive you become to lenders. They see it as a sign of lower risk, and that is great news for you because it translates into better mortgage rates and more affordable monthly payments. On the flip side, if your credit score is on the lower end, lenders might raise their eyebrows and charge you higher interest rates. So, what can you do to turn the tables in your favor? Well, here’s the good news: it’s never too late to give your credit score a makeover and qualify for those dreamy mortgage rates, even if you already have a loan. First things first, take a close look at your credit report. Hunt for any lingering outstanding balances and make it a priority to clear them. Pay your bills on time religiously because punctuality is key to a stellar credit score. You should also look into your credit report for any errors.
If you want to fast-track your journey to homeownership while also getting a discount on your mortgage rate, you should always remember this golden rule. The more you put down, the less you owe. So, why does a larger down payment matter? Well, when you plunk down a chunk of change, you’re slashing the principal amount you owe. Less principal means less interest to cover the life of your loan. In simple terms, you’re saving big bucks. Sure, some loans offer those tempting low down payment options. However, you should ask yourself, “Do I need low down payment options or do I want to get lower mortgage rates.” After all, it all comes down to your specific situation and requirements.
When you are in the market, you will have a number of options and it is essential that you consider all your options before making a decision. Here’s what you should do. Reach out to a variety of lenders. Each of them has their own set of loan products, complete with unique rates and fees. You need to find the one that suits your specific tastes. I would suggest that you consult with your real estate agent too before choosing a mortgage lender. Realtors are already working in your real estate market and they know which lenders suit which type of buyers. Another important thing to keep in mind is that many people just focus on the numbers while comparing their options. However, you also need to consider your personal situation. Keep in mind that it’s your money, your future, so do your homework to ensure you’re snagging the best deal. You must also remember that the interest rates can change quickly, so act fast. Contact various lenders on the same day and ideally at around the same time. This way, you’re comparing apples to apples. Oh, and don’t forget about the fees. Factor them into your calculations to see the true potential savings.
Now, another secret hack to lower your mortgage rate is to buy mortgage discount points. When you opt for mortgage discount points, you’re making a one-time upfront payment at closing that permanently shrinks your interest rate. Let me tell you that each discount point costs 1% of your loan size, and in return, it slices your mortgage rate by around 0.25 percentage points. Lenders usually offer this option when you opt to lock your rate. Now, it is essential that you explore various discount point scenarios and find the one that suits your financial strategy the best. But you must also keep in mind that there’s a thing called the “break-even point.” It is the time in months when your total savings surpass the cost of the points. If that countdown extends beyond your homeownership timeline, then mortgage points might not be your best bet. So, I would say that if you’re in it for the long haul with your new home, buying these points can be a genius money-saving move.
And how I forget to mention seller concessions. For those who don’t know, a seller concession is when the seller agrees to pay for some or all of your buying costs. These costs can also include mortgage discount points. You can negotiate seller concessions with your seller at the point of sale and these can save you up to 9 percent of the purchase price. And it depends on the size of your down payment and mortgage. However, you must keep in mind that you can use these funds only for closing costs, which means that you cannot sneak them into your down payment or use them for other expenses like commissions or non-closing fees. It’s a helping hand for your closing costs specifically and you see these types of concessions more frequently in new construction which is my next point.
Interestingly, the current market conditions have made buying a new construction home a better option. Why? Well, the mortgage rates are a lot lower when it comes to buying a new construction home. We are talking rates as low as 4.8% – yes, you heard that right! And just to be clear, the typical mortgage rate is more than 7% nowadays. But that’s not all! When you are in the market for a new home, you have some bargaining power. I would highly suggest that you negotiate on everything you can because builders are offering a number of incentives but you won’t know this if you go by yourself. You need an agent who represents you when buying new construction to maximize all possible scenarios like rate buydowns, mortgage rate locks, and forward commitments. Not all builders offer the same offers or incentives. Talk with your expert realtor and schedule a visit having your realtor by your side.
Now that you’re armed with these mortgage-saving secrets, it’s time to take action. By implementing these tips, you can potentially save thousands on your mortgage and make your homeownership dreams a reality. Don’t let soaring rates hold you back from your dream home. Reach out to me today to discover the current value of your property in Miami’s ever-evolving real estate landscape. Don’t miss out on the opportunity to maximize your savings and secure the home you’ve always wanted.
Thank you for reading. I look forward to connecting with you in Miami soon!
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