Mortgage rates are expected to stay near or at these levels for several months. But buyers using brokers can take steps to reduce their housing expenses, and existing homeowners can reduce their overall credit expenses, by securing a lower mortgage rate. There are strategies like optimizing your client’s credit score or making a larger down payment to help them save money! Working to reduce the rate can save tens of thousands of dollars in savings over the course of a loan.

‍

A move that is easier said than done, sometimes, is to increase your client’s credit score. If their credit needs work, consider advising them to take steps to raise their credit score before applying for a mortgage. Brokers are good at this, since lenders look at credit scores to decide whether your client qualifies for a home loan and what interest rate they receive. FICO credit scores range from 300 to 850,with 850 being the best score possible. Higher credit scores show good debt responsibly in the past, so it lowers the risk to a lender. This can help your client secure a lower interest rate and save big.

‍

According toa 2024 Lending Tree study, when borrowers moved from the "fair" credit score range (580 to 669) to the "very good" range (740 to799), they shaved 0.22 percentage points off their interest rate. That rate difference helped borrowers save $16,677 over the lifetime of a home loan.

‍

Borrowers can make a bigger down payment, the amount of money they contribute to their home purchase upfront. Orion’s brokers know that each type of home loan comes with a minimum down payment, usually ranging from zero to 5 percent, but a higher down payment means a lower interest rate because the lender takes on less risk when your client contributes more toward the loan.

‍

Orion has some fine adjustable-rate mortgages that have lower start rates than 30-yearfixed rate loans. An adjustable-rate mortgage, or ARM, is a home loan with a fixed rate for a set introductory period, such as five years. Once that period ends, the interest rate can go up or down in regular intervals for their remaining term. The average 5/1 ARM rate is about 0.5 percent lower for the first several years than the average rate for 30-year fixed-rate mortgages.

‍

Along those lines, shorter loan terms, such as 10-year and 15-year mortgages and ARMs, have lower interest rates. Choosing a shorter repayment term could help you save money because you'll be paying less in interest over the long term. But warn your client from the homebuying mistake of choosing a shorter loan term just for the lower rate. Shorter loan terms mean your client will have less time to repay the money they borrow, resulting in higher monthly payments, so it's important to ensure they fit within their budget. Brokers can help.

‍

An Orion AE may lower your client’s rate, help them save on closing costs, or offer other incentives to get your client onboard. They may advise paying points, also known as a mortgage discount point, which is an upfront fee your client can pay the lender in exchange for a lower interest rate on their home loan. Each point costs 1 percent of the purchase price of a home and usually knocks the rate down by 0.25 percent.

‍

A temporary mortgage rate buydown is a program where the borrower, or seller, pays a fee at closing to lower their interest rate for the first few years of their loan term. Because of the considerable upfront cost, this strategy only makes financial sense when someone else pays that fee. Home builders, sellers and even some lenders may offer to cover this type of buydown to boost sales, especially when market rates are elevated.

‍

Our Orion AEs are well-versed in all of these techniques, and can tailor-make a loan just for you to help your client.