{"id":184511,"date":"2025-08-29T14:55:36","date_gmt":"2025-08-29T20:55:36","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=184511"},"modified":"2025-08-29T14:55:39","modified_gmt":"2025-08-29T20:55:39","slug":"9-legitimate-ways-to-get-a-lower-mortgage-rate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/9-legitimate-ways-to-get-a-lower-mortgage-rate","title":{"rendered":"9 Legitimate Ways to Get a Lower Mortgage Rate Right Now"},"content":{"rendered":"\n

For<\/span> the last three years, <\/span>potential homebuyers and <\/span>refinancers<\/span><\/a> have been awaiting lower interest rates like a post-SAT teen hoping to hear back from their favorite college. But unlike anxious students, property buyers have been holding out longer than expected. <\/span><\/p>\n\n\n\n

The wait may have been in va<\/span>in, though, because there are several clever hacks to strategically lower your interest rate and get into the real estate market faster.<\/span><\/p>\n\n\n\n

1. Avoid the Rush With a Midweek Lock-In<\/span><\/h2>\n\n\n\n

When rate shopping, especially for higher mortgage amounts, <\/span>fine<\/span> margins make a big difference over time. Locking in an interest rate in the middle of the week, when lender volume is likely at its lowest, as opposed to a Monday, Friday, or the weekend, could help you get the best deal. <\/span><\/p>\n\n\n\n

“One buyer was able to lock on a Wednesday, after lender volume decreased for midweek, and locked in a rate 0.15% less than the rate they <\/span>were offered<\/span> from the previous Monday,” Ben Mizes, real estate agent, investor, and CEO of Clever Real Estate, told<\/span> MarketWatch<\/span><\/a>. “In this case, the rate difference on a $400,000 loan saved them about $12,000 over the life of the loan.”<\/span><\/p>\n\n\n\n

2. Consider an Adjustable-Rate Mortgage (Only if it Makes Sense for Your Long-Term Goals)<\/span><\/h2>\n\n\n\n

If your goal is to refinance to a lower rate, choosing an<\/span> adjustable-rate mortgage<\/span><\/a> can be a little like playing Russian roulette with a fully loaded gun\u2014only to find rates are higher when your<\/span> ARM<\/span><\/a> expires.<\/span><\/p>\n\n\n\n

When the cost of refinancing <\/span>is factored<\/span> in, ARMs often backfire. However, they can be a good move for investors who don’t plan to hold their property for a long time, such as <\/span>flippers<\/span><\/a>, <\/span>BRRRR<\/span><\/a> proponents, or those who intend to move from their primary residence after renovating it and living there for two years to take advantage of<\/span> capital gains breaks<\/span><\/a>. In these instances, an interest-only mortgage can be a good choice for obtaining the lowest possible monthly payment. <\/span><\/p>\n\n\n\n

3. Go Old School With a High Credit Score and Down Payment<\/span><\/h2>\n\n\n\n

Before terms such as “creative financing” came into play, the method of obtaining the best mortgage from your parents’ generation\u2014assuming you are between Gen Z and Gen X in age\u2014involved having an <\/span>excellent credit score<\/span><\/a> and putting down the largest <\/span>down payment<\/span><\/a> possible. Here’s some sobering news: Your parents were right.<\/span><\/p>\n\n\n\n

Leveraging <\/span>low down payment<\/span> loans in the current mortgage environment is not the best strategy. <\/span>Rather<\/span>, raise your credit score to 740 or higher, and <\/span>throw everything and the kitchen sink at<\/span> the down payment amount to reach the <\/span>magical<\/span> 20% mark <\/span>to<\/span> offset PMI.<\/span> When rates drop, you can refinance and pull cash out if your house price has gone up and still avoid PMI.<\/span><\/p>\n\n\n\n

4. Negotiate Seller Credits and Maximize Lender Incentives<\/span><\/h2>\n\n\n\n

Negotiating a seller credit during the sale of a property can have significant benefits over the life of the mortgage. <\/span><\/p>\n\n\n\n

Chris Desino, a real estate broker and owner at Ocala Horse Properties, told MarketWatch:<\/span><\/p>\n\n\n\n

“I negotiate seller credits with a single purpose: Permanent buydown first, [and put] everything else second. If the lender allows, I pair this with single-premium PMI paid with the same credit. The payment falls twice. No monthly PMI drag, cleaner <\/span>cash flow<\/span><\/a> from day one. Portfolio banks discount for loyal deposits and autopay. I ask buyers to open accounts early and move payroll so we can unlock relationship pricing.”<\/span><\/em><\/p>\n\n\n\n

5. Date the Rate, Marry the House to Capitalize on an Appreciating Market<\/span><\/h2>\n\n\n\n

This oldie but goodie <\/span>is often overlooked<\/span> when buyers fixate on interest rates to determine whether they should buy. “Home prices continue to increase at 5% to 6% year over year\u2026 the longer the buyer waits, the more they lose the opportunity to improve their net worth,” Neil Christiansen, a specialist from Churchill Mortgage, told the<\/span> New York Post<\/span><\/a><\/em>.<\/span><\/p>\n\n\n\n

Buying now and waiting for an opportune time to refinance will <\/span>net you<\/span> more <\/span>in<\/span> equity<\/span><\/a> than savings from a rate drop.<\/span><\/p>\n\n\n\n

6. Consider a Credit Union<\/span><\/h2>\n\n\n\n

Local credit unions may not have all the bells and whistles of your mainstream national lender, but they can offer you a lower interest rate. Credit unions are nonprofit organizations that traditionally serve the local community, so look in your neighborhood to find one. This<\/span> government comparison chart<\/span><\/a> offers an idea of potential savings.<\/span><\/p>\n\n\n\n

7. Go Back to the Future With a Retro Financing Move: The 2-1 Buydown<\/span><\/h2>\n\n\n\n

Jump in the DeLorean and fire up the flux capacitor, because here’s another old-school move from the \u201880s, when interest rates were at a mind-boggling 20%. <\/span><\/p>\n\n\n\n

A <\/span>2-1 buydown<\/span><\/a> allows homebuyers to pay a lower interest rate for the first two years, with the seller covering the differenc<\/span>e. <\/span>This<\/span> enables the seller to sell the home without lowering the price. The strategy has been employed most recently by homebuilders offering incentives to buyers to purchase a new home. They help give a buyer some breathing space before a higher mortgage rate kicks in in year three.<\/span><\/p>\n\n\n\n

8. Find Your Debt Sweet Spot and Boost Earnings for a Strong DTI<\/span><\/h2>\n\n\n\n

Debt is a mercurial creature: If you have no debt, your credit score might <\/span>be impacted<\/span>, resulting in a higher mortgage rate. <\/span>But too much<\/span> debt can also <\/span>impact<\/span> your credit score, potentially <\/span>resulting in<\/span> a higher interest rate.<\/span> <\/span><\/p>\n\n\n\n

There is a debt sweet spot, however, that lenders use to calculate your <\/span>debt-to-income ratio<\/span><\/a> (DTI): <\/span><\/p>\n\n\n\n