How loan officers are saving deals as mortgage rates cross 6.6%

Loan officers are shifting their playbooks to keep deals alive as “Rates rose today in response to rising oil prices. That’s not good for affordability, but in my experience, borrowers rarely change their behavior overnight due to a single rate move. It usually takes sustained news and social media coverage of rising rates before buyer confidence and behavior really start to shift,” said Brendan McKay, owner at Bethesda, Maryland-based McKay Mortgage Co.

McKay told HousingWire he has not lost any deals due to the recent rate increases. “I may lose one that locked in with a local retail lender earlier this week. I’m still able to offer better terms, but the gap has narrowed,” he added. 

While it’s too early to see the immediate fallout from Friday’s rate jump as So far, the pipeline is holding, but it requires active management. “Over the last couple of weeks, we’ve seen no deals fall apart, but people in escrow go to the seller and request a 2-1 buydown. That’s the strategy that we’ve been using to keep the deals together,” Fronti said.

Sellers whose properties have been sitting on the market for weeks are increasingly willing to offer credits rather than risk having to relist. In the But that’s not the reality for the broader market. “Not everybody’s making that level of income, at least my clientele,” he added.

For the typical buyer, Neft said he is having to get creative. That means pushing for seller credits to Seller credits between 3% and 5% are not uncommon depending on the sale price, he said, with the funds directed toward temporary or permanent rate buydowns.

Additionally, some buyers are simply tired of waiting or are being pushed by life events like a new baby or an empty nest. To accommodate them, Crescenzo is leaning into alternative loan products, including “The quicker the closing, the better, because I don’t think the market is going to get better,” Neft said. “The conflict in Iran, from what little I know, doesn’t look like there’s an easy resolution. The longer it takes, the longer the chance of interest rates going up is. Hopefully, it’s a short-term thing.”

Meanwhile, for some buyers, the psychological hurdle of higher rates is softening.

Kevin Leibowitz, based in Brooklyn, New York, said his clients at Grayton Mortgage view elevated rates as transitory, believing they will have the ability to refinance in the not-too-distant future. For others, a $25 to $100 increase in the