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February 14, 2025
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February 14, 2025
How to Negotiate a Lower Mortgage Rate on Your New Home
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Mortgage rates—just like love—can be unpredictable. Last week, predictions pointed to rates dropping below 7%—and they did, but for the wrong reason. A favorable CPI inflation report was expected to help rates, but the numbers came in much hotter than anticipated.
This caught virtually everyone off guard, sending rates soaring back above 7%.
But then, the very next day, the PPI inflation report, which tracks wholesale prices, came in much lower than expected. That calmed the markets down a little, and rates rebounded.
Then today, on Valentine's Day, retail sales data was released—and it was a big miss. That was the push needed to bring rates back below 7%, which is great news.
So, what's going on? Consumer spending is slowing down. One major reason: Credit card debt is at an all-time high—$1.2 trillion and counting.
People aren’t spending like they used to. Instead of shopping for clothes, shoes, and handbags, they’re paying off high-interest credit cards. This trend is likely to continue impacting retail sales moving forward.
When consumers cut back on spending, the economy slows down— which can help drive interest rates lower.
Will this trend continue? That’s the big question.
Another factor making Wall Street nervous: Trump’s tariff talk. You’ve all heard about it.
Raising tariffs could push inflation higher, as importing countries may raise prices to cover the extra costs. But the goal isn’t to tank the economy—would higher inflation really be the objective?
Instead, the intent is to make U.S. goods more competitive and bring jobs back home. It’s a high-stakes game, and Wall Street is hedging its bets, waiting to see the long-term impact.
Now, let’s talk about buying a home.
What does this mean for buyers?
For those in the market for a home, mortgage rates may be a concern. While interest rates have been unpredictable, there are ways to secure a lower rate and reduce monthly payments.
A buydown is one option that can make homeownership more affordable. With a 2-1 buydown, the interest rate is temporarily lowered for the first two years of the loan, providing time to adjust before locking into the full market rate.
Example: 2-1 Buydown
Year 1: The interest rate is 2% below the market rate.
Year 2: The rate is 1% lower than the market rate.
Year 3 and beyond: The loan locks in at today’s original market rate.
Sellers are often willing to contribute toward a buydown as an incentive to get their home sold.
And here’s the best part: The seller only pays this if they agree to a full-price offer.
So, for those looking to buy a home and secure a lower mortgage rate, a 2-1 buydown may be the solution. This strategy can help lock in a more affordable monthly payment—without waiting for interest rates to drop.
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The information contained is the viewpoint of the presenter(s). Individuals should consult their own financial representative.
Estimated Mortgage Payment is for exemplary purposes only. Contact a licensed loan officer for exact numbers and APR. Additional rates and terms may apply and are subject to change without notice. Loan scenario assumes a purchase price of Zillow's list price and a 10% down payment. Points and fees not included. Property tax, homeowners insurance, mortgage insurance, and HOA fees are approximate and may vary. Other fees may apply. Product displayed is a conventional 30-year fixed rate mortgage using the current average rate as shown on Mortgage News Daily (mortgagenewsdaily.com).
Estimated Qualifying Income assumes a homebuyer has a FICO score above 740, no other credit debt, and a debt-to-income (DTI) ratio of 43%.
For exact numbers and APR or to run a loan scenario based on your own credit and income, contact our office at (858) 259-8700.
Rate Source: Mortgage News Daily. Rates displayed are approximate, subject to change, and do not necessarily reflect rates available to you. MND’s methods involve an objective component based on lenders' raw prices as well as a subjective impression from their network of originators. For more information about how these rates are calculated, visit www.mortgagenewsdaily.com/mortgage-rates/about.
Mortgage News Daily (MND) is a trademark of Brown House Media, Inc. Zillow is a trademark of Zillow, Inc. CrossCountry Mortgage has not been authorized, sponsored, or otherwise approved by Brown House Media, Inc. or Zillow, Inc.
Equal Housing Opportunity. All loans subject to underwriting approval. Certain restrictions apply. Call (858) 259-8700 for details. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program. CrossCountry Mortgage, LLC is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the federal government. CrossCountry Mortgage, LLC is not affiliated with or acting on behalf of or at the direction of the Veteran Affairs Office or any government agency. Certificate of Eligibility required for VA loans. By refinancing, the existing loan total finance charges may be higher over the life of the loan.
