Pla2na/Getty Images
Mortgage interest rates fell so many times just this September that prospective homebuyers can be forgiven for thinking that they’re lower than they actually are.
After all, rates here fell to an 11-month low, then dropped further, hitting nearly a one-year low and a three-year low, all by September 18. Now at an average of 6.13%, mortgage rates are much more affordable than they were just two years ago, when the median rate hovered near its highest level since 2000.
However, that doesn’t mean that mortgage rates are as low as many would like, either, especially after they sat near record lows just at the start of the decade. Still, with rates here on a steady decline again and the potential for another rate cut from the Federal Reserve in October elevated, homebuyers have reason to be optimistic. But they’ll also need to be strategic in their approach. If you’re one of those waiting for another rate drop in October to encourage action, it can be beneficial to take a few other steps in the interim. Below, we’ll break down three to consider now.
Start by comparing your current mortgage rate offers for further context now.
What homebuyers should do while waiting for an October mortgage rate drop
While each homebuyer’s approach to the current mortgage rate climate may be slightly different, many could benefit from taking the following steps now:
Get pre-approved – after checking your credit report
A mortgage loan pre-approval from a reputable lender will show sellers that you’re serious and have the financial means to purchase a home, should you be ready to make an offer the next time mortgage rates dip. Having one readily available can help you stand out from what is likely to be a more competitive field of buyers should rates continue to decline.
Just be sure to get your pre-approval after you’ve checked your credit report. Ensure there are no inaccuracies or outdated or misleading information there first (and dispute it if there is). Since your credit will be checked as part of a conventional pre-approval, you’ll want to make sure it’s in good shape and that your score is as high as possible. And that begins with a close check of your current credit report.
Learn more about getting a mortgage pre-approval now.
Research real estate agents
An experienced and professional real estate agent can be especially valuable in today’s evolving market. With home values high in many parts of the country and a presumed uptick in buyers as the mortgage rate climate cools, having a real estate agent to navigate the homebuying process can easily be the difference between your ability to buy your dream home or being outbid by a competing buyer. Real estate agents aren’t just well-versed in the homebuying process; they can also help you determine where to buy, how much to spend, what to offer, and, if you’re a current homeowner, how much to list your existing home for.
Start comparing rates, costs (and the fine print) online
Just because mortgage rates aren’t quite as low as you’d like doesn’t mean that you shouldn’t start comparing lenders, costs and the fine print associated with each now. By doing so, you’ll be able to better determine ahead of time which lender is most likely the best fit for you. And with online marketplaces combining much of the information you need in one location, it’s arguably easier than ever to compare and contrast your options now. This will also give you a head start in October, or in the months after, by knowing which lenders are actually offering the best rates and terms … and which ones just appear to be.
The bottom line
This long-awaited decline in mortgage interest rates offers homebuyers new and exciting opportunities. But they’ll need to be ready to take advantage of them, perhaps in a shorter window of opportunity than what’s ideal. By taking the above three steps now, before any October mortgage rate drops still to come, they’ll put themselves in a better and more-informed position, increasing their likelihood of homebuying success at the same time.
