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What experts say homebuyers should do with interest rates falling
Mortgage rates have been dropping in recent weeks, and while they’re still much higher than the record lows of the pandemic, affordability is finally starting to improve.
It should continue improving, too. The Federal Reserve just slashed rates for the first time in four years and is largely expected to make additional interest rate cuts at its November and December meetings. That should trickle down to mortgage rates as well, which could spur more homebuyers to enter the market as we get later into the year and into 2025.
Are you considering a home purchase if rates fall enough? If so, the time to prepare is now.
Start comparing the top mortgage loan options available to you here.
What experts say homebuyers should do with interest rates falling
Here’s what experts say you should do to prepare for buying a home as interest rates drop:
Spruce up your credit
While waiting for rate cuts can certainly help, one way to ensure you get a lower mortgage rate is to come in with excellent credit.
Just look at recent data from ICE Mortgage Technology: As of Sept. 24, the average interest rate on a 30-year conventional loan was 6.10% for someone with an 800 credit score or higher. For those with a 620 to 639 score, the average rate jumps to 6.84%.
“Prepare yourself now by keeping your credit score as high as possible,” says Annie Cole, a financial coach at Money Essentials for Women.
To do this, avoid opening any new accounts or credit cards, and make sure you’re paying all your bills on time (set them on autopay if you can). You can also pull your credit report and dispute any errors you find, and work on reducing your debts.
Find out what mortgage rates you could qualify for now.
Start saving
Having a higher down payment can often qualify you for a lower interest rate, as it means the lender has to loan you less money. You will also need cash for closing costs, moving expenses, utility deposits and other fees that come with buying a house, so start your savings efforts as early as possible.
Mike Hardy, managing partner at Churchill Mortgage, recommends setting your homebuying budget and saving at least your estimated mortgage payment every month.
“This makes sure that what you budget in theory will work practically, and most importantly, that there are no surprises,” Hardy says. “It’s the true test of affordability to make sure you aren’t getting overextended.”
Don’t just stick the cash in your regular banking account, though. To maximize your savings, opt for a high-yield savings account, and be sure to shop around for a great rate.
“Your local bank is likely to be offering savings rates below 0.5%, while high-yield savings accounts may be near 5%,” says Jay Zigmont, a certified financial planner and founder of Childfree Wealth. “You don’t get a guaranteed return with any savings account, but a high-yield savings account may get you ten times what you are getting in your local bank.”
If you do want that guaranteed return and have a few months until you’re ready to buy, you can put the cash in a certificate of deposit (CD) account.
“Locking in rates for CDs or fixed annuities could be a smart idea,” says George McFarlane, president of 7 Waters Advisors. “You can benefit from higher interest rates for a more extended period.”
Research mortgage brokers and lenders
There are hundreds of mortgage lenders to choose from, and each one has different loan offerings, fees, rates and levels of customer service. To ensure you get the best fit, start researching your options now.
You can also look up local mortgage brokers in your area. These are like personal shoppers for mortgage loans, and they can help you compare loan options and lenders.
They also help you with your application and, as Cole explains, “can shop around to get you the best mortgage interest rate possible.”
Be ready to make a competitive offer
As mortgage rates fall, you can expect more homebuyers to jump into the market, making for a more competitive market all around.
“If rates drop, we will undoubtedly experience a resurgence in mortgage applications,” says John Aguirre, a mortgage broker at Loantown. “It’s almost as certain as gravity at this point.”
When this happens, you will need to do more to stand out with sellers — particularly if you find yourself in a bidding war. Offering a larger earnest money deposit or leaseback are options that can help, as can being flexible with your closing date. You should also get preapproved for your mortgage loan.
“Without a pre-approval letter, it can be harder to get an offer accepted,” Cole says.
The bottom line
Even if you’re not ready to pull the trigger on a home purchase right now, prepping today can help you have the best chance of qualifying for a loan, winning that dream house, and snagging a low interest rate in the process.
Talk to a mortgage professional or real estate agent for more personalized guidance. They can help you prepare for the exact conditions of your local housing market.
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50 “exceptionally well-preserved” Viking skeletons unearthed in Denmark
Archaeologists said they’ve unearthed more than 50 well-preserved Viking skeletons over the past six months, providing rare insights into how the sea-faring society lived and traveled.
“This discovery offers extraordinary opportunities to perform a wide range of scientific analyses, which can reveal more about the general health, diet, and origins of those buried,” said Michael Borre Lundø, archaeologist and curator at Museum Odense, in a statement.
He added that it was “truly unusual” to find so many well-preserved skeletons at once.
The 2,000-square-meter Viking burial ground was used during the 9th and 10th centuries. It was discovered on the southern outskirts of the village of Åsum.
The skeletons are so well-preserved archaeologists believe they will be able to pull DNA samples for scientific analysis. Subsequent analysis might reveal whether some of the buried Vikings were related — something that had never been examined in similar grave findings, said Borre Lundø.
“It will be incredibly exciting to learn where these people came from and whether the same families were buried here across multiple generations,” said Sarah Croix, associate professor at Aarhus University in Denmark.
Several skeletons had high standing in society, the archaeologists said, as evidenced by one of the women being buried in a wagon hull — likely the wagon she traveled in. She was buried along with a beautiful glass bead necklace, an iron key, a knife with a silver-threaded handle, and a small shard of glass that may have served as an amulet.
There was a finely decorated wooden chest at the foot of the wagon. Archaeologists do not know what was inside of the chest, but imagine the woman was buried with all of her finest things.
Other skeletons were found buried with jewelry, including one female with a metal ring around her neck, another with a single red glass bead hanging on a cord, and another with a special buckle on.
Recent Viking discoveries include nearly 300 silver coins believed to be more than 1,000 years old, which were discovered in 2023 near a Viking fortress site in northwestern Denmark. And a large Viking burial site was discovered in 2020 by Norwegian archaeologists.
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