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Mortgage Rates Are Dropping—Here’s What To Do If You’re Buying

December 6, 2023


Min Read
Woman checking homebuying list.

TLDR: When mortgage rates drop and you’re actively buying or refinancing, you’ll want to shop around to make sure you’re getting the lowest rate. (And the best deal overall.)

Let’s set the stage using the current market as an example. If you locked in your rate around Halloween 2023, federal rates were around 7.92%. Only 3 weeks later, they were 7.37%. That’s over a half of a percentage point, which equated to a $153/month drop in payment on a $425,000 home (the average US home price in 2023).$153/month savings in only 3 weeks. Point being, no matter where you are in the homebuying process, if rates are dropping, you’re going to want to get a second opinion on any rate you’ve been quoted previously. So, let’s talk about where you are and what you can do to get the lowest rate.




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If you’re in contract on a home

We’ll start here since time is tight. First off, congratulations! You won the bid and are ready to rock. In between inspections, appraisals and moving plans, you’ll want to look into lowering your rate—it could save you thousands or even tens-of-thousands of dollars, which is likely why you’re here reading this article. It must be said, even if you’ve already secured financing, it’s never too late to search for a second financing opinion prior to signing at the closing table.

But, time is of the essence.

If you’ve already locked a rate with a lender, or even received loan disclosures, you’re unlikely to be able to lower your rate with that lender. Getting a few quotes from new lenders is a smart choice. Definitely chat with a Lower advisor to get a quick, no-commitment quote that won’t impact your credit score.

If you’re still choosing a lender

Good news is, if you haven’t applied or gotten pre-approved with a lender yet, you can start now. Make sure to get a few opinions. And of course, you’ll want to check with us here at Lower. Enter a few pieces of information and a no-impact credit check to see your rate.

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Check this one piece on every estimate you receive

When you have all of your loan estimates to review, it may seem like a no-brainer to go with the lowest quoted rate, but you'll always want to take a second look. That is, a lender may show the best rate, but that super-low quote may actually cost you more at closing. These upfront costs, called discount points or "buying down your rate" can run you upwards of an additional 2-3% of the loan amount at closing. You'll want to check this on every loan estimate you receive.

If you have any questions about loan estimates or quotes you've received, ask your Lower loan advisor, or get started with Lower here.

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