Mortgage rates remain elevated, but the recent trend is better described as moving sideways with a slight upward bias, rather than moving sharply higher.

Mortgage News Daily’s average 30-year fixed mortgage rate finished Friday, July 31, at 6.83%. Rates moved in both directions during the week before ending close to where they started.

For buyers and current homeowners, this means the best opportunity may not come from waiting for a dramatic rate drop. It may come from negotiating better terms, choosing the right loan structure, or using existing home equity strategically.

Buyer hesitation can create negotiating leverage

Many buyers remain cautious because mortgage rates are still in the upper sixes. While that hesitation is understandable, it can create an advantage for qualified buyers who are ready to move forward.

When fewer buyers are competing for the same home, sellers may be more willing to contribute toward closing costs, make repairs, or help fund an interest rate buydown.

Instead of only asking how much the seller will reduce the purchase price, buyers should also consider how seller credits could improve the overall financing structure.

Depending on the transaction, seller credits may be used to:

• Cover closing costs and preserve the buyer’s savings

• Permanently reduce the mortgage rate

• Fund a temporary interest rate buydown

• Pay prepaid property taxes and homeowners insurance

• Reduce the total amount of cash needed at closing

A price reduction can be valuable, but it may not create a significant change in the monthly mortgage payment. In some situations, using the same amount toward closing costs or an interest rate buydown can provide a greater immediate benefit.

Homeowners may be able to buy before selling

Many homeowners have substantial equity in their current property but cannot access that equity until the home sells.

This can make the process of purchasing the next home difficult. Homeowners may feel that they have to sell first and find temporary housing, or make an offer that is contingent upon the sale of their existing home.

Bridge financing may provide another option.

A bridge loan or bridge line of credit may allow a qualified homeowner to access a portion of the equity in the current home before it sells. Those funds may then be used toward the down payment and closing costs on the next property.

This strategy may help homeowners:

• Make a stronger offer without a home-sale contingency

• Avoid moving into temporary housing

• Take more time preparing the current home for sale

• Avoid feeling pressured to accept a weak offer

• Coordinate the purchase and sale around their family’s schedule

Bridge financing is not appropriate for every household. The homeowner may need to qualify while accounting for the current mortgage, the new mortgage, and the bridge payment.

Because of this, it is important to review the strategy with a lender before beginning the home search.

First-time buyers may need a better plan, not a 20% down payment

One of the most common misconceptions about buying a home is that a 20% down payment is required.

In reality, qualified buyers may have access to several lower down payment options, including:

• Conventional financing with as little as 3% down

• FHA financing with as little as 3.5% down

• VA financing with no required down payment for eligible borrowers

• USDA financing with no required down payment for eligible borrowers and properties

• State or local down payment assistance programs

• Gift funds from an eligible family member

• Seller-paid closing costs

The best option depends on the buyer’s credit, income, available savings, property type, location, and long-term plans.

For some buyers, preserving savings after closing may be more important than making the largest possible down payment. For others, a larger down payment may help reduce the monthly payment or mortgage insurance.

There is no single correct loan structure for every buyer. The goal is to compare the available options and choose the strategy that best supports the buyer’s overall financial position.

Should buyers wait for mortgage rates to fall?

Waiting may make sense for someone who is still improving credit, building savings, stabilizing employment, or working toward a more comfortable monthly budget.

However, waiting only because mortgage rates are expected to fall comes with another risk.

If rates improve significantly, more buyers may return to the market. That could increase competition, reduce seller flexibility, and make it more difficult to negotiate the incentives that may be available today.

A better approach is to focus on the factors that can be controlled:

• Establish a comfortable monthly payment

• Understand the total cash required at closing

• Compare available mortgage programs

• Identify seller or builder incentives

• Develop a clear rate-lock strategy

• Review whether buying before selling is possible

• Make sure adequate savings will remain after closing

Buying a home should not depend on perfectly predicting mortgage rates. It should depend on whether the home, monthly payment, cash requirement, and overall strategy make sense for the buyer.

The opportunity in today’s market is often found in the structure.

For buyers, that may mean negotiating seller concessions or selecting a loan program that preserves cash.

For current homeowners, it may mean using accumulated equity to purchase the next home before selling.

For first-time buyers, it may mean discovering that the required down payment is lower than expected.

Every situation is different, and small changes to the financing strategy can make a meaningful difference.

To review your buying power, explore a buy-before-you-sell strategy, or compare available mortgage options, call or text Milestone Home Mortgage at 303-800-4595.

Mortgage rates and program terms vary based on credit, property, loan amount, occupancy, available assets, and other qualification factors. Published market averages are for general informational purposes and are not an individual rate quote.