3 solid reasons why the best time to buy a home is towards the end of the year

One factor on every home buyer’s mind is whether they’re getting a deal. One of the best-kept secrets of in real estate buy at the end of the year if you can swing it.

Every year the Federal Housing Finance Agency which oversees Fannie Mae and Freddie Mac releases their annual loan limits. The loan limits may change annually based on data compiled by the federal government. Recently, the conforming loan limit has increased to $510,400 and in most areas, the FHA loan limits which also have been increased for 2020 also support purchasing a house at the end of the year because you’re able to borrow more money for a more favorable terms and rates which could improve borrowing power lowering debt to income ratio and supporting a better family budget. Here are three reasons…

Most consumers are not focused on purchasing a house from the beginning of December to about the middle of January. Most folks are recovering from Thanksgiving focused on Christmas and New Year’s and the broader holiday season. Simply put, not all but most sellers have a motivation perhaps more than normal if they’re willing to list their house at the slowest time of the year by industry standards. Good time to capitalize on this from a buyer’s perspective. If you make the right offer on a house there could be some negotiating wiggle room either in purchase price credits or some sort of seller concession as this time of year is typically slower.

Interest rates at the beginning of December to about the middle of January we have the Santa Bubble. The Santa Bubble e typically makes mortgage rates go up a tad as Fortune 500 companies are trying to maximize profits for your end reporting’s, retail sales data and spending is up typically this time of year and there is generally more optimism in the markets. Not much typically happens from the beginning of December to about the middle of January other than a small uptick in interest rates, however, any negative economic information at this time could spell keeping a lid on rates such as the present impeachment proceedings that are transpiring.

Warren Buffett perhaps the world’s greatest investor says that he buys when there is blood in the streets.  Go against the masses. If everyone else is spending for the holiday you should be focused on aligning your budget and rechanneling those monies into purchasing a home. There will be many more holidays and family celebrations to come, but the opportunity to purchase a house could radically change your wealth position and those opportunities may be far and few.

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When buying a home, it’s natural to want the lowest mortgage rate possible. But sometimes, chasing a slightly better rate from another lender—especially after your offer has already been accepted—can backfire in a big way. Let’s walk through a real-world scenario. You’ve got an offer accepted on a house. You’re working with a lender who has you approved, documents in underwriting, and a 21-day close of escrow in place. Everything is moving forward. Then you hear from another lender offering a rate that’s 0.25% lower, with slightly better closing costs. It’s tempting. But before you make a jump, here’s what you need to consider. Switching Lenders Comes with Time Costs When you pivot to a new lender mid-contract, they’ll need to: Re-underwrite your entire loan, Order a new appraisal, Disclose and sign new loan documents, Submit the file for final loan approval, Schedule and fund closing—all over again. This doesn’t happen overnight. Even in ideal circumstances, the new lender is likely going to need at least 25–30 days to close. If you’re in a fast-moving or competitive market, this is a real problem. Most sellers won’t grant a contract extension just because you’re switching lenders. So, what happens next? A Contract Extension Can Jeopardize Your Deal Asking for a contract extension means the seller must agree to delay closing. But that delay introduces risk—especially if the seller has backup offers or simply wants certainty. They may not grant the extension. Or worse, they could cancel the deal outright and take another buyer’s offer. Even if the seller agrees to extend, your earnest money and negotiation power could take a hit. And for what? A slightly lower rate that might save you $50 to $75 a month? Mortgage Rates Aren’t as Far Apart as You Think Here’s the truth: all mortgage lenders get their money from the same place—the bond market. The pricing differences between lenders usually range from 0.125% to 0.25% in rate on any given day. If one lender seems to be offering dramatically better pricing, the first thing you should ask is: How? Head over to FreddieMac.com and check the average 30-year fixed rate posted weekly. This is one of the most reliable benchmarks for where rates truly stand in the market. If a lender is quoting you a rate that’s well below that average, ask for the details: Are they charging extra points? Is this a teaser rate with a prepayment penalty? Is it based on a different loan product or risky structure? Often, what sounds “too good to be true”… is. Consider the Bigger Picture Think long-term. If you’re financing $600,000, a 0.25% lower rate may reduce your payment by roughly $75/month. But what if you lose the house and have to start over? That monthly savings doesn’t mean much if you’re outbid on your dream home or lose your deposit. Also, remember: you’re not going to keep this rate forever. Today’s homebuyers typically refinance when rates drop by about 0.75% or more. So if rates fall within the next year or two, you’ll likely be refinancing anyway. Instead of paying extra points now or risking the entire deal for a minor monthly savings, it may be better to accept a slightly higher rate—knowing you’ll refinance when the time is right. The Real Risk Isn’t the Rate—It’s the Delay When shopping for a home loan, don’t just ask, “What’s your rate?” Ask: Can you close on time? Is this rate sustainable or based on hidden costs? Will switching lenders delay or jeopardize my contract? A home purchase contract is a binding agreement between you and the seller to perform within a set timeframe. If you can’t meet those dates because you're chasing a slightly better rate elsewhere, you may want to reconsider if now is the right time to buy. Final Thoughts Yes, interest rates matter. But execution matters more. Before making a switch mid-transaction, talk to your lender. Have an honest conversation about pricing, timelines, and strategy. You might find that staying the course, securing the house, and planning to refinance later offers a better path to financial security. Want to Know Your Options? Let’s compare rates and strategies the smart way—without risking your dream home. 👉 Click here to get a custom rate quote today.

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