Why First-Time Home Buyers Hesitate: 6 Decision Traps (and How to Decide Anyway)
Posted on October 29, 2026 Leave a Comment
The Buying Decision Series, Part 1 of 2
BY JESSE J. RIVAS, REALTOR® • PUBLISHED OCTOBER 27, 2026 • LODI, CA
| Quick answer Most first-time buyers hesitate for predictable psychological reasons, not because they’re bad with money. The six most common are loss aversion (losses feel bigger than gains), status quo bias (renewing the lease feels like “no decision”), ambiguity aversion (unknown costs feel scarier than known rent), anchoring on old rules like “20% down,” choice overload, and mental bandwidth stretched thin by everyday pressure. The fix is to turn unknowns into numbers, set decision rules before you shop, and decide by a date: ready now, or not yet with a written plan. |
Key takeaways
- First-time buyers were 21% of U.S. purchases in NAR’s 2025 Profile, a record low, and the median first-time buyer is now 40.
- The median first-time buyer down payment was 10%, not 20%.
- Hesitation usually follows a known decision pattern. Naming it makes it easier to manage.
- “Not yet” is a good decision when it comes with a date and a plan. “Someday” isn’t a decision.
If you’ve been “almost ready” to buy your first home for a few years, you’re in big company. In NAR’s 2025 Profile of Home Buyers and Sellers, first-time buyers made up just 21% of purchases, the lowest share since NAR started tracking in 1981, and the typical first-time buyer was 40 years old. Affordability is a real part of that. Rates are higher than they were a few years ago (Freddie Mac’s 30-year average was 7.40% on October 15, 2026), and the typical home in Lodi is valued around $511,700 according to Zillow.
But in my conversations with renters around Lodi and San Joaquin County, money is rarely the whole story. Often the bigger obstacle is how the decision feels. Decision researchers have spent decades studying exactly these feelings. Here are the six I see most, and what to do about each one.
What is the psychology behind first-time buyer hesitation?
Buying a first home combines everything people find hardest to decide: a large amount of money, a long time horizon, uncertainty about the future, and a lot of steps. Behavioral economics shows that under those conditions people predictably favor the familiar option, overweight possible losses, and delay. None of this means you’re irrational. It means you’re human, and it helps to know which pattern is driving your hesitation.
| The trap | What it sounds like | The fix |
| Loss aversion | “What if prices drop right after I buy?” | Write both scenarios in dollars over 5 years: rent vs. own, prices down 5% vs. up 5%. |
| Status quo bias | “I’ll just renew one more year.” | Treat renewing as a decision with a cost. Set a decision date. |
| Ambiguity aversion | “I don’t even know what I’d qualify for.” | Get pre-approved and a full payment estimate. Unknowns become numbers. |
| Anchoring | “I need 20% down.” / “Rates were 3%.” | Compare today’s options to today’s rent, not to an old rule or old rate. |
| Choice overload | Scrolling listings every night for a year. | Write 3–5 must-haves and your deal-breakers before touring. |
| Scarcity / bandwidth | “I can’t take on one more thing right now.” | Shrink the decision to the next step only: one call, one pre-approval. |
1. Loss aversion: why does losing money feel worse than gaining it?
Daniel Kahneman and Amos Tversky’s prospect theory (1979) found that people weigh potential losses more heavily than equal gains; later estimates put the effect at roughly two to one. In home buying, “What if the value drops after I buy?” feels far heavier than “What if I keep paying rent while prices rise?”, even though both cost money. Rent also doesn’t register as a loss because it’s routine, while a down payment is one large, visible number.
What to do: put both losses on paper. Over five years, what would you pay in rent? What would you pay to own (payment, maintenance, closing costs), and what would you build in equity? Then run a price drop and a price rise. Seeing both sides in dollars takes the emotional weight off the one you’ve been imagining.
2. Status quo bias: is waiting really the safe choice?
Economists William Samuelson and Richard Zeckhauser (1988) showed people stick with the current option far more often than its merits justify. A related finding, omission bias (Ritov and Baron, 1990), shows we judge a bad outcome caused by acting more harshly than the same outcome caused by not acting. So if you buy and it goes badly, it feels like your fault; if you wait and miss out, it feels like the market’s fault.
What to do: call renewing your lease what it is, a decision with a price. Judge both choices by the same standard, and pick a date to decide.
3. Ambiguity aversion: why does the unknown feel scarier than rent?
Daniel Ellsberg (1961) showed people prefer a known risk over an unknown one, even when the unknown might be better. You know your rent to the dollar. You probably don’t know your exact mortgage payment, cash to close, or whether you’d qualify. The known option wins by default.
What to do: convert unknowns into numbers. That’s why pre-approval is always the first step I recommend: it tells you what you qualify for. A lender’s estimate shows the full payment including taxes, insurance, mortgage insurance, and any HOA or Mello-Roos. An inspection shows the home’s actual condition.
4. Anchoring: do you really need 20% down?
Tversky and Kahneman (1974) showed an initial number shapes later judgments even when it isn’t relevant. Two anchors freeze first-time buyers. The first is “you need 20% down.” In NAR’s 2025 Profile, the median first-time buyer put down 10%, and 92% financed their purchase. FHA loans allow 3.5% down with qualifying credit, and CalHFA offers down payment assistance such as MyHome for eligible first-time buyers. The second anchor is the 3% mortgage rates of 2021. Comparing today’s rate to one that no longer exists doesn’t help you decide.
What to do: compare today’s ownership cost to today’s alternative, which is your current rent and its likely increases, not to an old rule or old rate.
5. Choice overload: why does browsing listings make it harder?
Sheena Iyengar and Mark Lepper’s famous jam study (2000) found shoppers offered fewer choices were more likely to buy. Later research found the effect isn’t universal; a 2015 meta-analysis showed it appears mainly when options are hard to compare and people are unsure what they want. That describes house hunting well. Barry Schwartz and colleagues (2002) also found that “maximizers,” people who search for the best possible option, tend to be less satisfied with their choices than people who choose “good enough” against clear criteria.
What to do: before you tour, write down three to five must-haves and your deal-breakers (payment ceiling, commute, bedrooms, single-story, HOA tolerance). The question becomes “Does this home meet my criteria?”, which has an answer.
6. Scarcity: why is it hard to decide when life is already full?
Economist Sendhil Mullainathan and psychologist Eldar Shafir’s research on scarcity (including Mani et al., Science, 2013) found that financial pressure takes up mental bandwidth and makes complex decisions harder. A home purchase has a lot of moving parts. When you’re already carrying work, family, and bills, it’s natural to push it to “later.” This is especially true for single parents, which we cover in Part 2.
What to do: shrink the decision. You don’t need to decide to buy a house this week. You only need to decide the next step, such as a 15-minute call or a pre-approval application, and let your agent and lender carry the rest of the process.
How do I decide if I’m ready to buy my first home?
I use a five-step approach with clients that I call the Comfortable Homeownership Plan™:
- Find your comfortable payment, not your maximum. Start from your real monthly budget and work backward to a price.
- Turn unknowns into numbers. Pre-approval, a full payment estimate, and your total cash to close.
- Set your decision rules before you shop. Maximum payment, must-haves, deal-breakers, and how much savings you’ll keep after closing.
- Run a premortem. Psychologist Gary Klein’s technique: imagine it’s two years later and buying went badly. What went wrong? Plan for the top two risks now.
- Decide by a date. “Ready” or “Not yet, with a written 6–12 month plan.” Both are real decisions.
| Why I plan around “comfortable” I’ve lost a home to foreclosure, and I rebuilt my credit one collection account at a time before buying again. I know firsthand what a payment that’s too tight does to a household. That’s why I’ll never steer you toward the most you can borrow. My job is to help you make a decision you’ll still feel good about in five years, even if that decision is “not yet.” |
Frequently asked questions
Is it normal to be scared to buy your first house?
Yes. Buying a home combines a large sum, long-term commitment, and uncertainty, which are the conditions under which people most often delay. Naming the specific worry and replacing unknowns with numbers (pre-approval, payment estimate) usually reduces the fear.
How much do first-time buyers usually put down?
In NAR’s 2025 Profile, the median first-time buyer down payment was 10%. FHA loans can require as little as 3.5% with qualifying credit, and California offers assistance programs through CalHFA for eligible buyers.
Is it better to wait for rates to drop?
No one can reliably predict rates. A better question is whether today’s payment is comfortable for your budget for the long term. If it isn’t, waiting with a savings and credit plan is reasonable. If it is, waiting for a rate that may not come carries its own cost.
What’s the first step to buying a home in Lodi?
Get pre-approved with a lender. It tells you what you qualify for and what your payment would be, which makes every later decision clearer.
| Ready to find your comfortable number? Book a free 15-minute call and we’ll walk through your next step, with no pressure and no obligation. Call (510) 506-3800 or email JesseRivas@KW.com. Watch the video: [embed YouTube video here] Next in the series: Part 2, Buying Your First Home as a Single Parent: A Decision Framework for One Income → |
| About the author Jesse J. Rivas, REALTOR® (DRE #02282782) is the owner of Jesse Rivas Realty, brokered by Keller Williams Central Valley (DRE #02324551). He helps first-time buyers, single-parent buyers, sellers, and homeowners facing financial hardship across Lodi, Stockton, Manteca, and San Joaquin County. Before real estate he spent 23 years in heavy civil construction, and he has bought, sold, and lost a home of his own, which is why he plans every purchase around a payment that’s comfortable, not just approved. Call (510) 506-3800 • JesseRivas@KW.com • JesseRivas.KW.com |
Sources
- National Association of REALTORS®, 2025 Profile of Home Buyers and Sellers (Nov 4, 2025)
- Freddie Mac Primary Mortgage Market Survey, Oct 15, 2026 (via FRED)
- Zillow Home Value Index, Lodi, CA (data through Aug 31, 2026)
- Kahneman & Tversky (1979); Tversky & Kahneman (1974, 1992); Samuelson & Zeckhauser (1988); Ritov & Baron (1990); Ellsberg (1961); Iyengar & Lepper (2000); Chernev et al. (2015); Schwartz et al. (2002); Mani et al. (2013); Klein (2007)
This article is educational and is not financial, tax, or legal advice. Program rules and rates change; confirm current details with a licensed lender. Equal Housing Opportunity.
Step by Step: Buying a Home With an Assumable Loan (and Closing the Equity Gap)
Posted on October 26, 2026 Leave a Comment
By Jesse J. Rivas, Realtor® | Jesse Rivas Realty, Keller Williams Central Valley | Updated October 2026
The Assumable Loan Series
Part 1: What Is an Assumable Loan? A Plain-English Guide for Central Valley Buyers
Part 2: How to Assume an FHA Loan
Part 3: How to Assume a VA Loan (Yes, Even If You Are Not a Veteran)
▶ Part 4: Step by Step: Buying a Home With an Assumable Loan (and Closing the Equity Gap)
Quick Answer
To buy a home with an assumable loan: (1) confirm the loan type and that the seller is open to an assumption, (2) run the numbers including the equity gap, (3) write an offer with realistic timelines, (4) apply with the seller’s loan servicer, (5) arrange cash or secondary financing for the gap, and (6) close with a signed assumption agreement and the seller’s release of liability. Expect 60 to 90 days or more.
The Step-by-Step Process
- Get clear on your budget. Talk with a loan officer about your credit, income, and how much cash you have. You need to qualify for the assumption, and possibly for a second loan.
- Find the right home. Most listings do not advertise an assumable loan. I can check the loan type on listings and ask sellers directly.
- Confirm the loan details. Before writing an offer, get the loan type, current balance, interest rate, remaining term, monthly payment (including taxes, insurance, and any MIP), and the servicer’s name.
- Run the real numbers. Compare your total monthly cost (assumed loan plus any second loan) against a new loan at today’s rates. See the example below.
- Write a strong offer. Include the assumption contingency, a longer closing timeline, who pays which fees, and, for VA loans, entitlement and release-of-liability terms.
- Apply with the servicer. Submit their assumption application and documents quickly. Missing paperwork is the number one cause of delays.
- Line up the equity gap. Finalize cash, gift funds, or a second loan so everything is ready when the servicer approves you.
- Close. Sign the assumption agreement, pay the funding or processing fees and closing costs, and confirm the seller’s release of liability. The home and the loan are now yours.
Running the Numbers: When Does Assuming Win?
Here is a simple illustration. These numbers are hypothetical and show principal and interest only. Your real numbers will depend on the loan, your rate on any second loan, taxes, insurance, and mortgage insurance.
| Option A: New loan | Option B: Assume + second loan | |
| Purchase price | $450,000 | $450,000 |
| Cash down | $50,000 | $50,000 |
| First loan | $400,000 new loan at 6.5%, 30 years | $300,000 assumed at 3.0%, 26 years left |
| Second loan | None | $100,000 at 8.0%, 30 years |
| Monthly principal & interest | About $2,528 | About $2,120 ($1,386 + $734) |
| Difference | About $408 less per month |
In this example, the buyer saves roughly $400 a month even after financing $100,000 at a higher rate. But notice what drives the savings: the smaller and cheaper the equity gap, the better the assumption looks. If the gap were $200,000 or more at a high rate, the advantage could shrink or disappear. That is why I run these numbers with every buyer before we write an offer.
Ways to Cover the Equity Gap
| Option | How it works | Keep in mind |
| Cash savings | Pay the gap at closing | Simplest; keep reserves for after you move in |
| Gift funds | A family member helps with the gap | Lenders and servicers require gift documentation |
| Proceeds from selling a home | Use equity from your current home | Timing the two closings takes planning |
| Second loan | A separate loan covers part of the gap | Higher rate; must be counted when you qualify; servicer must allow it |
| Seller carry-back | The seller finances part of the gap | Needs clear written terms; not every seller or servicer allows it |
| Price negotiation | A lower price shrinks the gap | Works best on homes that have sat on the market |
Common Mistakes to Avoid
- Assuming the loan is assumable without confirming the loan type and servicer requirements.
- Using a standard 30-day close. Assumptions take longer; set realistic dates up front.
- Forgetting taxes, insurance, and MIP when comparing payments.
- Skipping the release of liability (sellers) or entitlement terms on VA loans.
- Ignoring the second-loan rate. The blended cost is what matters, not just the low first-loan rate.
Frequently Asked Questions
Do I still need a home inspection and appraisal?
An inspection is strongly recommended on any purchase. An appraisal may not be required by the servicer for the assumption itself, but a second lender usually requires one, and it protects you.
Can I refinance later?
Yes. Once you own the home, you can refinance like any homeowner, though most people assume a loan specifically to keep the low rate.
Who handles the assumption, the lender or the escrow company?
The loan servicer approves you and prepares the assumption documents. Escrow and title handle the rest of the closing, just like a normal purchase.
Do I need a real estate agent for an assumption?
You are not required to have one, but assumptions have more moving parts than a typical purchase. An agent who understands the process can protect your timeline and your money.
Let’s Talk About Your Next Move
Assumable loans can open doors that today’s rates have closed for many buyers. If you are ready to see whether one fits your budget, or want to tour a home that may have an assumable loan, let’s talk. I will run the numbers with you and give you an honest answer.
- Call or text: (510) 506-3800
- Email: JesseRivas@KW.com
- Website: JesseRivas.KW.com | Blog: JesseJRivas.com
- Instagram: @jesse_rivas_realty | Facebook: JesseRivasRealty
- YouTube: @JesseJRivasRealty | TikTok: @jesserivasrealty
- All my links: linktr.ee/jesserivasrealty
Follow along for the rest of this series, Central Valley market updates, and plain-English homebuying education. No pressure, just good information.
Disclosure
This article is for general educational purposes only and is not legal, tax, or lending advice. Loan assumption rules, fees, and approval are set by FHA, VA, USDA, and each loan servicer, and can change. Always confirm details with the loan servicer, a licensed loan officer, and your own advisors. Example numbers are illustrations, not quotes or rate offers. Jesse J. Rivas, Realtor®, DRE #02282782. Keller Williams Central Valley, Broker DRE #02324551.
How to Assume a VA Loan (Yes, Even If You Are Not a Veteran)
Posted on October 22, 2026 Leave a Comment
By Jesse J. Rivas, Realtor® | Jesse Rivas Realty, Keller Williams Central Valley | Updated October 2026
The Assumable Loan Series
Part 1: What Is an Assumable Loan? A Plain-English Guide for Central Valley Buyers
Part 2: How to Assume an FHA Loan
▶ Part 3: How to Assume a VA Loan (Yes, Even If You Are Not a Veteran)
Part 4: Step by Step: Buying a Home With an Assumable Loan (and Closing the Equity Gap)
Quick Answer
VA loans are assumable, and the buyer does not have to be a veteran. The buyer must be approved by the loan servicer, and usually pays a VA funding fee of 0.5% of the loan balance (some veterans are exempt) plus a capped processing fee. If the buyer is a veteran who substitutes their own VA entitlement, the seller’s entitlement is restored. If not, the seller’s entitlement stays tied to the loan until it is paid off.
As someone who served in the Army Reserves, VA loans are close to my heart. They are one of the best benefits our veterans earned, and assumable VA loans can be a win for both sides of the deal when they are handled correctly. Here is how they work.
Who Can Assume a VA Loan?
For VA loans made on or after March 1, 1988 (nearly all loans today), the buyer must be approved for creditworthiness by the servicer, or by VA in some cases. Beyond that, there are two kinds of buyers:
| Veteran buyer | Non-veteran buyer | |
| Can assume the loan? | Yes, if approved | Yes, if approved |
| VA funding fee | 0.5% of the balance (exempt for eligible veterans, such as those receiving VA disability compensation) | 0.5% of the balance |
| Substitution of entitlement | Available if the buyer has enough entitlement | Not available |
| Seller’s VA entitlement | Restored once substitution is approved | Stays tied to the loan until it is paid off |
| Seller release of liability | Should be requested and confirmed in writing | Should be requested and confirmed in writing |
What Does a VA Assumption Cost?
- VA funding fee: 0.5% of the remaining loan balance, compared with 2.15% or more on a new VA purchase loan with less than 5% down. On a $300,000 balance, that is $1,500.
- Processing fee: VA limits it, generally $300 when the servicer has automatic authority or $250 when VA must approve, with some local variations allowed.
- Normal closing costs: title, escrow, and recording still apply.
- The equity gap: your down payment and/or second loan to cover the difference between price and balance.
If You Are a Veteran Selling Your Home
Offering your VA loan for assumption can make your home stand out, but protect yourself:
- Ask for a release of liability. Without it, you can remain responsible if the buyer stops paying.
- Understand your entitlement. If a non-veteran assumes your loan, your VA entitlement stays tied up until that loan is paid off, which can limit your ability to buy your next home with a VA loan.
- Prefer a veteran buyer who substitutes entitlement if you plan to use your VA benefit again soon. Make substitution a condition of the contract.
- Decide early. Your entitlement decision affects your next purchase, so settle it before you accept an offer.
Jesse’s Tip
For veteran sellers, I recommend writing the substitution and release-of-liability requirements directly into the purchase agreement, and getting the servicer’s written confirmation before closing. It protects your benefit for the next home.
How Long Does It Take?
Plan on roughly 60 to 90 days or more from accepted offer to closing. Timelines depend on the servicer and whether VA needs to review the entitlement substitution.
Frequently Asked Questions
Can a civilian really take over a VA loan?
Yes. Any buyer who meets the servicer’s credit and income requirements can assume a VA loan. The difference is that a civilian cannot substitute entitlement, so the seller’s entitlement stays with the loan.
Is there mortgage insurance on an assumed VA loan?
No. VA loans do not have monthly mortgage insurance. The one-time funding fee replaces it.
Do I have to live in the home?
Servicers and VA generally expect the assuming buyer to occupy the home. Confirm the specific requirement with the servicer before writing an offer.
Can I use a second loan to cover the equity gap?
Often, yes, depending on the servicer and lender. We will need to confirm what the servicer allows. Part 4 covers equity gap options.
Let’s Talk About Your Next Move
Whether you are a veteran, an active-duty family, or a civilian buyer who wants a lower rate, I would be glad to help you figure out if a VA assumption makes sense, and to make sure everyone’s interests are protected.
- Call or text: (510) 506-3800
- Email: JesseRivas@KW.com
- Website: JesseRivas.KW.com | Blog: JesseJRivas.com
- Instagram: @jesse_rivas_realty | Facebook: JesseRivasRealty
- YouTube: @JesseJRivasRealty | TikTok: @jesserivasrealty
- All my links: linktr.ee/jesserivasrealty
Follow along for the rest of this series, Central Valley market updates, and plain-English homebuying education. No pressure, just good information.
Disclosure
This article is for general educational purposes only and is not legal, tax, or lending advice. Loan assumption rules, fees, and approval are set by FHA, VA, USDA, and each loan servicer, and can change. Always confirm details with the loan servicer, a licensed loan officer, and your own advisors. Example numbers are illustrations, not quotes or rate offers. Jesse J. Rivas, Realtor®, DRE #02282782. Keller Williams Central Valley, Broker DRE #02324551.
Next in the series: Part 4, Step by Step: Buying a Home With an Assumable Loan.
How to Assume an FHA Loan: Requirements, Costs, and What to Expect
Posted on October 21, 2026 Leave a Comment
By Jesse J. Rivas, Realtor® | Jesse Rivas Realty, Keller Williams Central Valley | Updated October 2026
The Assumable Loan Series
Part 1: What Is an Assumable Loan? A Plain-English Guide for Central Valley Buyers
▶ Part 2: How to Assume an FHA Loan
Part 3: How to Assume a VA Loan (Yes, Even If You Are Not a Veteran)
Part 4: Step by Step: Buying a Home With an Assumable Loan (and Closing the Equity Gap)
Quick Answer
All FHA-insured loans are assumable. For FHA loans originated on or after December 15, 1989, the buyer must pass a creditworthiness review by the loan servicer and generally must live in the home as their primary residence. The servicer can charge a processing fee of up to $1,800, and the existing FHA mortgage insurance usually stays with the loan.
FHA loans are the most common assumable loans you will run into in the Central Valley, because so many local buyers used FHA financing for its low down payment. If a home you like has an FHA loan with a low rate, here is what it takes to take it over.
FHA Assumption Requirements
- The loan must be FHA-insured. Every FHA loan is assumable, but how it is assumed depends on when the loan was made. Almost every FHA loan you will see today was originated after December 15, 1989, which means a full credit review is required.
- You must qualify with the servicer. The servicer manually underwrites you: credit history, income, employment, and debt-to-income ratio, using FHA standards.
- You generally must live in the home. FHA assumptions on newer loans are for owner-occupants. Investors generally cannot assume these loans.
- You need to cover the equity gap. FHA allows secondary financing to help, as long as the terms are clear and the new debt is counted when you qualify.
- The seller should get a release of liability. The servicer completes HUD form 92210.1 to release the seller once you are approved and assume the loan.
What Does an FHA Assumption Cost?
| Cost | What to expect |
| Servicer processing fee | Up to $1,800 (FHA doubled the cap from $900 in May 2024) |
| Credit report and verifications | Actual cost, passed through by the servicer |
| Release of liability paperwork | Up to $45 (form HUD 92210.1) |
| Title, escrow, recording | Normal purchase closing costs still apply |
| Equity gap | Your down payment plus any second loan, the biggest number by far |
If your credit is approved but the assumption falls through for reasons outside your control, FHA rules require the servicer to refund half of its processing fee.
Do Not Forget FHA Mortgage Insurance (MIP)
When you assume an FHA loan, the mortgage insurance premium comes with it. Depending on when the loan was made and how much was put down, that MIP may last for the life of the loan. Ask the servicer for the current monthly MIP amount so your payment estimate is accurate. Even with MIP, a low-rate FHA loan can still beat a brand-new loan.
How Long Does It Take?
FHA guidance calls for the servicer to complete the creditworthiness review within 45 days of receiving your complete application package. In real life, the whole process from accepted offer to closing often runs 60 to 90 days or more, depending on the servicer. Build that into your contract timelines, and keep your paperwork moving quickly.
Jesse’s Tip
Ask for the servicer’s assumption package on day one. Some servicers have a dedicated assumptions department; others are slow. Knowing who you are dealing with early helps everyone set realistic closing dates.
Frequently Asked Questions
Can I assume an FHA loan if I already own a home?
Possibly, but you generally must intend to live in the home you are buying as your primary residence. Talk with the servicer and a loan officer about your situation.
Do I need 3.5% down to assume an FHA loan?
No. There is no set down payment on the assumed loan. What you pay is the equity gap, the difference between the price and the remaining balance, which is often more than 3.5%.
Can the seller help with my closing costs?
In many cases, yes. Sellers can contribute toward your normal closing costs within program limits. We can negotiate that in your offer.
Will the seller be off the hook after I assume the loan?
Only if the servicer approves you and issues a release of liability. That is standard for a qualified FHA assumption, and it protects the seller.
Let’s Talk About Your Next Move
If you are looking at a home with an FHA loan, or you want me to find out whether a listing has one, reach out. I will help you get the servicer’s requirements, estimate your real monthly payment, and put together an offer that works.
- Call or text: (510) 506-3800
- Email: JesseRivas@KW.com
- Website: JesseRivas.KW.com | Blog: JesseJRivas.com
- Instagram: @jesse_rivas_realty | Facebook: JesseRivasRealty
- YouTube: @JesseJRivasRealty | TikTok: @jesserivasrealty
- All my links: linktr.ee/jesserivasrealty
Follow along for the rest of this series, Central Valley market updates, and plain-English homebuying education. No pressure, just good information.
Disclosure
This article is for general educational purposes only and is not legal, tax, or lending advice. Loan assumption rules, fees, and approval are set by FHA, VA, USDA, and each loan servicer, and can change. Always confirm details with the loan servicer, a licensed loan officer, and your own advisors. Example numbers are illustrations, not quotes or rate offers. Jesse J. Rivas, Realtor®, DRE #02282782. Keller Williams Central Valley, Broker DRE #02324551.
Next in the series: Part 3, How to Assume a VA Loan.
What Is an Assumable Loan? A Plain-English Guide for Central Valley Buyers
Posted on October 20, 2026 Leave a Comment
By Jesse J. Rivas, Realtor® | Jesse Rivas Realty, Keller Williams Central Valley | Updated October 2026
The Assumable Loan Series
▶ Part 1: What Is an Assumable Loan? A Plain-English Guide for Central Valley Buyers
Part 2: How to Assume an FHA Loan
Part 3: How to Assume a VA Loan (Yes, Even If You Are Not a Veteran)
Part 4: Step by Step: Buying a Home With an Assumable Loan (and Closing the Equity Gap)
Quick Answer
An assumable loan is an existing mortgage that a qualified buyer can take over from the seller, keeping the seller’s interest rate, remaining balance, and remaining term. FHA, VA, and USDA loans are generally assumable with lender approval. Most conventional loans are not. The buyer still has to qualify, and usually has to pay the difference between the purchase price and the loan balance, called the equity gap.
If you have been shopping for a home in Lodi, Stockton, or anywhere in San Joaquin County, you already know the hardest part is not finding a house you like. It is the monthly payment. Interest rates today are well above where many homeowners locked in a few years ago, and that difference can mean hundreds of dollars a month.
Here is something most buyers never hear about: some homes come with a loan you can actually take over, low rate and all. That is what an assumable loan is, and I want to walk you through it in plain English, the same way I would at my kitchen table.
How an Assumable Loan Works
Normally, when you buy a home, the seller’s mortgage gets paid off at closing and you take out a brand-new loan at today’s rates. With an assumption, the seller’s loan does not get paid off. Instead, you step into the seller’s shoes and keep making the payments on that same loan.
That means you keep:
- The same interest rate the seller locked in (this is the big one)
- The same remaining balance (not the full purchase price)
- The same remaining term (if the seller has 26 years left, you have 26 years left)
You do not get to pick a new lender. You apply with the seller’s loan servicer, the company that collects the monthly payments, and they decide whether you qualify.
Which Loans Are Assumable?
| Loan type | Assumable? | What to know |
| FHA | Yes, all FHA loans | For loans made after December 15, 1989, the buyer must pass a credit review and plan to live in the home. See Part 2. |
| VA | Yes, and you do not have to be a veteran | Buyer must qualify. 0.5% VA funding fee unless exempt. The seller’s VA entitlement may stay tied to the loan. See Part 3. |
| USDA | Yes, but usually not at the old rate | Most USDA assumptions are on new rates and terms. Keeping the original rate is limited to special cases such as transfers between relatives, divorce, or death. |
| Conventional (Fannie Mae / Freddie Mac) | Generally no | Most have a “due-on-sale” clause, so the loan must be paid off when the home sells. Some adjustable-rate (ARM) loans can be assumed. Transfers after death or divorce are legal exceptions, not normal home sales. |
In practical terms, if you are looking for a low rate to take over in the Central Valley, you are looking for a home with an FHA or VA loan.
Why Buyers Love Assumable Loans
- A lower rate. Taking over a loan in the 2% to 4% range when new loans cost much more can lower your monthly payment substantially.
- More of your payment goes to principal. A loan that is a few years old is further along its schedule, so you build equity faster.
- Lower closing costs on the assumed portion. There is no new loan origination on the assumed balance. You pay an assumption fee instead, which is capped by FHA and VA rules.
- VA bonus: the funding fee on an assumption is 0.5%, much lower than on a new VA purchase loan.
The Catch: The Equity Gap
This is the part nobody puts in the headline. You take over the seller’s loan balance, not the price of the home. The difference between the price and the balance is the equity gap, and you have to cover it, usually with cash, a second loan, or a combination.
Example (illustration only)
Purchase price: $450,000
Seller’s remaining FHA loan: $300,000 at 3.0%, 26 years left
Equity gap: $150,000 (price minus loan balance)
If you bring $50,000 cash and finance the other $100,000 with a second loan, you have two payments. Part 4 walks through the math so you can see when it makes sense and when it does not.
The equity gap is why assumable loans are not a fit for everyone. But for buyers with savings, a family gift, proceeds from selling another home, or a seller willing to help, the savings can be significant.
Pros and Cons at a Glance
| Pros | Cons |
| Keep the seller’s lower interest rate | You usually need cash or a second loan for the equity gap |
| Lower monthly payment on the assumed balance | You cannot shop for a different lender on the assumed loan |
| Capped assumption fees | The process often takes longer than a normal loan, often 45 to 90 days or more |
| Faster equity building on a seasoned loan | FHA mortgage insurance usually carries over with the loan |
| Can make your offer stand out to sellers | The servicer, not you, controls the approval timeline |
Frequently Asked Questions
Can anyone assume a mortgage?
No. The loan must be an assumable type (usually FHA, VA, or USDA), and the buyer must be approved by the loan servicer based on credit, income, and debts, much like a regular loan.
Do I keep the seller’s interest rate?
With an FHA or VA assumption, yes. You keep the rate, remaining balance, and remaining term. USDA assumptions usually come with new rates and terms.
How do I find homes with assumable loans in Lodi or Stockton?
Most listings do not advertise it. An agent can check the loan type and ask the listing agent whether the seller is open to an assumption. Reach out and I will help you search.
Is an assumable loan always cheaper?
Not always. If the equity gap is large and you finance it at a high rate, your combined cost can approach or exceed a new loan. Run the numbers first.
Let’s Talk About Your Next Move
Assumable loans are one of the most overlooked tools for buyers in today’s market. If you want to know whether one could work for you, or you want to see homes in Lodi and San Joaquin County that may have an assumable FHA or VA loan, reach out. I will walk you through it, no pressure.
- Call or text: (510) 506-3800
- Email: JesseRivas@KW.com
- Website: JesseRivas.KW.com | Blog: JesseJRivas.com
- Instagram: @jesse_rivas_realty | Facebook: JesseRivasRealty
- YouTube: @JesseJRivasRealty | TikTok: @jesserivasrealty
- All my links: linktr.ee/jesserivasrealty
Follow along for the rest of this series, Central Valley market updates, and plain-English homebuying education. No pressure, just good information.
Disclosure
This article is for general educational purposes only and is not legal, tax, or lending advice. Loan assumption rules, fees, and approval are set by FHA, VA, USDA, and each loan servicer, and can change. Always confirm details with the loan servicer, a licensed loan officer, and your own advisors. Example numbers are illustrations, not quotes or rate offers. Jesse J. Rivas, Realtor®, DRE #02282782. Keller Williams Central Valley, Broker DRE #02324551.
Next in the series: Part 2, How to Assume an FHA Loan.
Blog 2: Things to Do in Lodi This Fall and Holiday Season (2026 Guide)
Posted on October 15, 2026 Leave a Comment
By Jesse J. Rivas, Realtor® — Lodi resident | Published October 2026 | Event details checked October 12, 2026 — always confirm with the organizer before you go.
Quick answer: Between mid-October and early January 2026, Lodi’s highlights include the free Family Carnival at Michael David Winery (Oct 17), Halloween on Saturday, Oct 31, the Lodi Sandhill Crane Festival (Nov 6–8), the new Lodi’s Magical Christmas at the Grape Festival Grounds (opens Nov 27), and the Lodi Parade of Lights downtown (Dec 3).
Living in Lodi means the calendar fills up fast once fall hits. Here’s my short list of what my family and neighbors in Vineyard Terrace are looking forward to — and what I’d tell anyone new to town not to miss.
2026 Lodi Fall & Holiday Events at a Glance
| Event | Date & time | Where | Cost |
| Family Carnival at Michael David Winery | Sat, Oct 17 • 4–7 PM | 4580 W Hwy 12, Lodi | Free |
| Downtown Lodi Safe Halloween | Sat, Oct 24th 12:00 – 2:00 PM | Downtown Lodi businesses | Free |
| Halloween | Sat, Oct 31 | Neighborhoods citywide | Free |
| Lodi Sandhill Crane Festival | Fri, Nov 6 (6–8 PM); Sat–Sun, Nov 7–8 (10 AM–4 PM) | Hutchins Street Square, 125 S. Hutchins St. | Free main festival; tours ticketed |
| Lodi’s Magical Christmas | Select nights Nov 27 – Jan 3, 5–10 PM | Lodi Grape Festival Grounds, 413 E. Lockeford St. | Ticketed |
| Lodi Parade of Lights | Thu, Dec 3 • 6:17 PM | Downtown Lodi | Free |
1. Family Carnival at Michael David Winery — Saturday, October 17
Michael David Winery hosts a free, all-ages carnival from 4 to 7 PM with face painting, balloon twisting, hands-on activities with the WOW Science Museum, a bubble station, crafts, lawn games, and local food trucks. It’s one of the easiest family outings in Lodi wine country — the kids get a carnival and the grown-ups get a beautiful winery setting.
2. Downtown Lodi Safe Halloween — Saturday, October 24
In past years, downtown Lodi businesses have hosted a daytime trick-or-treat for kids in costume, usually on the Saturday before Halloween. With Halloween itself on a Saturday in 2026, check Visit Lodi or the Downtown Lodi Business Partnership for this year’s date before you plan around it.
3. Halloween Night — Saturday, October 31
With Halloween on a Saturday this year, expect neighborhoods to be busy and to start early. In Vineyard Terrace, where I live, we see hundreds of trick-or-treaters most years.
Driving through any neighborhood on Halloween night? Slow down and watch for little ones crossing between cars.
4. Lodi Sandhill Crane Festival — November 6–8
Every fall, thousands of sandhill cranes come to spend the winter in the wetlands and farm fields of the Delta around Lodi, and the city celebrates with a festival now in its 28th year. The main festival at Hutchins Street Square is free and includes wildlife presentations, workshops, art, and exhibits. Guided tours out to crane habitat — including sunset fly-in tours — are ticketed and fill up, so book early through the Lodi Sandhill Crane Association.
If you’re new to Lodi, this is one of those traditions that makes the area feel different from the Bay Area.
5. Lodi’s Magical Christmas — opens November 27
New this year, the Lodi Grape Festival Grounds turns into a holiday light experience with synchronized light shows, a light tunnel, nightly drone shows (weather permitting), an LED dance floor, an open-air skating rink, and a trackless holiday train. It runs on select dates from November 27 through January 3:
- Nov 27–29
- Dec 2–6
- Dec 9–13
- Dec 16 – Jan 3
It’s ticketed, so check the event page for pricing and what’s included.
6. Lodi Parade of Lights — Thursday, December 3
The Kiwanis Club of Greater Lodi’s Parade of Lights is Lodi’s signature holiday night. More than 80 lighted floats, marching bands, and dance groups roll through downtown, and Santa arrives on a Lodi fire truck. The parade starts at 6:17 PM and draws close to 30,000 people, so locals often set out chairs early to save a spot. Carpool if you can — parking fills quickly. The city’s tree lighting has traditionally taken place just before the parade.
Why this matters if you’re thinking about moving to Lodi
Events like these are a big part of why people love living here. Lodi still has small-town traditions that whole families show up for — and if you’re relocating from the Bay Area, they’re a great way to meet people fast. Visiting during one of these events is also a smart way to get a feel for the town before you buy.
Frequently Asked Questions
When is the Lodi Parade of Lights in 2026?
Thursday, December 3, 2026, starting at 6:17 PM in Downtown Lodi.
Is the Lodi Sandhill Crane Festival free?
The main festival at Hutchins Street Square is free. Guided crane tours are separately ticketed.
What is Lodi’s Magical Christmas?
A new holiday light experience at the Lodi Grape Festival Grounds with light shows, drone shows, skating, and a holiday train, running on select dates from November 27, 2026 through January 3, 2027.
Are there free family events in Lodi this fall?
Yes — the Family Carnival at Michael David Winery (Oct 17), the main Sandhill Crane Festival (Nov 6–8), and the Parade of Lights (Dec 3) are all free.
New to Lodi or thinking about it? I live here and I’m always happy to share what Lodi is really like — events, neighborhoods, and all. Call or text (510) 506-3800 or email JesseRivas@KW.com.
Jesse J. Rivas, Realtor® | DRE #02282782 | Jesse Rivas Realty | Keller Williams Central Valley, Broker DRE #02324551
Blog 1: What Is Halloween Like in Vineyard Terrace, Lodi? A Resident’s View
Posted on October 13, 2026 Leave a Comment
By Jesse J. Rivas, Realtor® — Lodi resident and agent with Jesse Rivas Realty, Keller Williams Central Valley | Published October 2026
Quick answer: Vineyard Terrace, a newer neighborhood in west Lodi near DeBenedetti Park, draws hundreds of trick-or-treaters every Halloween. Families walk the streets together, neighbors decorate and hang out on their driveways, and the night works like an unofficial block party. That same neighborly spirit shows up for other holidays throughout the year.
I live here — so this is the inside view
As a Lodi real estate agent, I get asked about neighborhoods every week. People want the price range, the commute, the schools. But the question underneath all of those is usually simpler: what is it actually like to live there?
I can answer that one for Vineyard Terrace because it’s my neighborhood. And if you want to see what a neighborhood is really made of, there’s no better night to look than Halloween.
Where is Vineyard Terrace?
Vineyard Terrace sits off Lower Sacramento Road near DeBenedetti Park on Lodi’s west side. It’s a newer neighborhood — a little over five years old — which means most of us moved in within a few years of each other.
That timing matters more than you’d think. When everyone is new at once, people introduce themselves. Neighbors who might have stayed strangers in an older, settled area ended up getting to know each other early on — and you can feel it.
Halloween: hundreds of kids, every year
I don’t say “hundreds” lightly. Every Halloween since I’ve lived here, the sidewalks fill up as soon as the sun starts going down. There was one year that was a little slower, but every other year has been packed with kids and families.
What I love most isn’t the candy count — it’s who’s out there:
- Families walking together. Parents aren’t just waiting at the curb; they’re talking with each other and with whoever is handing out candy.
- Little ones in costume. The toddlers and kindergartners steal the show every single year.
- Neighbors going all out. Decorations, music, people pulling chairs onto the driveway to hand out treats and visit.
By the end of the night you’ve talked with more neighbors than you will most of the year. You meet new families on the street and catch up with the ones you’ve watched grow up. That’s community, and it doesn’t show up in a listing photo.
2026 note: Halloween falls on a Saturday this year. No school night usually means bigger crowds and an earlier start — plan your candy accordingly.
Tips for handing out candy on a busy street
- Buy more than you think you need. [Your first-year vs. now candy story.]
- Light the way. Porch lights on, walkway clear for strollers and small kids.
- Have an allergy-friendly option. A teal pumpkin signals non-food treats like stickers or glow sticks.
- Drive slowly. The streets are full of small pedestrians in dark costumes.
- Be ready by dusk. On a Saturday Halloween, trick-or-treating tends to start earlier.
It’s not just Halloween
Halloween is the biggest night because you interact with so many people at once, but the culture in Vineyard Terrace carries through the year.
That’s the part a builder can’t sell you. A neighborhood’s personality comes from the people in it.
A tip if you’re house hunting in Lodi
When you tour a home, you see the house — not the street. So here’s what I tell my buyers: go back to a neighborhood you like on a weekend afternoon or a holiday evening. Walk it. Say hi. Notice who’s outside.
A few questions worth asking a neighbor:
- How long have you lived here?
- What do people do around the holidays?
- Would you buy here again?
If you’re moving from the Bay Area or anywhere else, those five-minute conversations will tell you more than any online review.
Frequently Asked Questions
Where is Vineyard Terrace in Lodi, CA?
Vineyard Terrace is in west Lodi, off Lower Sacramento Road near DeBenedetti Park.
Is Vineyard Terrace busy on Halloween?
Yes. In my experience living there, the neighborhood sees hundreds of trick-or-treaters most years, with families walking together and many neighbors decorating.
How old is the Vineyard Terrace neighborhood?
It’s a newer neighborhood, a little over five years old as of 2026.
What else is there to do in Lodi around Halloween and the holidays?
Lodi has a full fall and winter calendar, including a free Family Carnival at Michael David Winery, the Lodi Sandhill Crane Festival, Lodi’s Magical Christmas at the Grape Festival Grounds, and the Lodi Parade of Lights. See my full 2026 events guide: [link to Blog 2].
Thinking about Lodi? If you’re curious about Vineyard Terrace or any Lodi neighborhood — what it’s really like, not just what it costs — I’m happy to talk. No pressure. Call or text (510) 506-3800 or email JesseRivas@KW.com.
Jesse J. Rivas, Realtor® | DRE #02282782 | Jesse Rivas Realty | Keller Williams Central Valley, Broker DRE #02324551
Part 3: “Marry the House, Date the Rate” — Why It’s an Opportunity, Not a Strategy (and the Real Cost of Waiting)
Posted on October 12, 2026 Leave a Comment
Jesse J. Rivas, REALTOR® | Keller Williams Central Valley | Updated October 6, 2026
Quick answer: “Marry the house, date the rate” means buying the right home now and refinancing if rates fall later. It can work, but it should never be the plan your budget depends on, because rates may not drop, refinancing costs money, and you must qualify again. Buy only if today’s payment is comfortable for the long term. If rates fall later, treat it as a bonus.
What does “marry the house, date the rate” mean?
The idea is simple: the house is the long-term commitment — the location, the schools, the commute, the equity. The rate is temporary, because you can refinance if rates improve. It is a useful way to think about the decision. It becomes risky when it turns into the only reason the numbers work.
What are the risks of counting on a refinance?
- Rates may not come down. Nobody can predict them. Rates were around 6.3% a year ago and are above 7% today.
- Refinancing has costs. Closing costs on a refinance commonly run in the thousands of dollars.
- You must qualify again. A job change, a credit dip, or a drop in home value can block a refinance.
- Lower rates can bring back competition. When rates fall, buyers return, and the negotiating power you have today may disappear.
My rule of thumb: if you would be stressed paying today’s payment for the next five years, don’t buy on the hope of a refinance. If you would be fine, a future rate drop is simply a nice possibility.
What does waiting actually cost?
Using the same $525,000 home with 5% down from Part 2:
| Scenario | Price | Rate | Monthly P&I |
| Buy today | $525,000 | 7.25% | $3,402 |
| Wait a year: prices +3%, rates drop | $540,750 | 6.75% | $3,332 |
| Wait a year: prices +5%, rates drop | $551,250 | 6.75% | $3,397 |
| Wait a year: rates don’t drop | Higher | 7.25%+ | More than today |
In the first two waiting scenarios, the payment ends up nearly the same — but you paid another year of rent and built no equity. And none of these outcomes is guaranteed. Prices could also stay flat or fall, which is why the decision should be based on your situation, not a forecast.
The regret question
Ask yourself: a year from now, which would bother you more — having bought at a higher rate with the option to refinance, or having kept renting while the home you could afford got more expensive? If you can’t comfortably afford to buy, there is no regret in waiting. Regret usually comes from passing on something that already fit.
Should I believe the headlines?
Headlines are built on national averages and are designed to grab attention. Your decision depends on your income, savings, credit, goals and how long you plan to stay. Two people reading the same headline can — and should — make different decisions.
Frequently asked questions
How much do rates need to drop to make refinancing worth it?
It depends on your loan size, closing costs and how long you’ll stay. Divide the refinance cost by the monthly savings to estimate how many months it takes to break even.
Is it smart to buy now and refinance later?
It can be, if today’s payment already works for you. It is not smart if the payment only works after a refinance that may never happen.
Want real numbers on your situation? Call or text Jesse at (510) 506-3800 or email JesseRivas@KW.com. No pressure — just the information you need to decide.
About the author: Jesse J. Rivas is a REALTOR® with Keller Williams Central Valley (DRE #02282782) serving Lodi, Stockton, Manteca, Modesto and San Joaquin County. He has bought and sold homes himself and works with first-time buyers, move-up buyers, sellers, and homeowners facing financial hardship.
Buying in 2026 series: Part 1 — Buying When Rates Are Above 7% • Part 2 — How to Lower Your Mortgage Payment • Part 3 — Marry the House, Date the Rate
Sources: Freddie Mac PMMS (Oct 1, 2026). Waiting scenarios are hypothetical. Payment examples are illustrations only, not a loan offer, rate quote, or financial advice. Jesse Rivas is not a lender or financial advisor. Confirm rates, program eligibility and seller-contribution limits with a licensed mortgage professional.
Part 2: How to Lower Your Mortgage Payment in 2026 — Seller Credits, 2-1 Buydowns and Points, Explained
Posted on October 11, 2026 Leave a Comment
Jesse J. Rivas, REALTOR® | Keller Williams Central Valley | Updated October 6, 2026
Quick answer: The three most common ways to lower a mortgage payment when rates are high are (1) asking the seller for a credit toward closing costs, (2) a temporary 2-1 buydown that lowers the rate by 2% in year one and 1% in year two, and (3) paying points for a permanently lower rate. With sellers offering concessions at record levels, many buyers can have the seller pay for some or all of these.
Our example home
To keep things real, every example below uses the same purchase: a $525,000 home (close to the San Joaquin County median), 5% down, a $498,750 loan, and a 7.25% 30-year fixed rate. Figures are principal and interest only.
Step 1: Ask for a seller credit toward closing costs
A seller credit is money the seller agrees to put toward your closing costs. Instead of asking for $15,000 off the price, you might ask for a $15,000 credit. A price cut of that size lowers the payment by only about $100 a month, while a credit can cover real costs at closing or pay for a buydown.
Every loan type limits how much a seller can contribute, often between 3% and 9% of the price depending on the program and your down payment. Your lender will confirm your limit before you write the offer.
Step 2: Consider a temporary 2-1 buydown
With a 2-1 buydown, money is set aside at closing to reduce your rate for the first two years. You still qualify at the full rate.
| Year | Effective rate | Monthly P&I | Savings vs. 7.25% |
| Year 1 | 5.25% | $2,754 | $648/mo |
| Year 2 | 6.25% | $3,071 | $331/mo |
| Years 3–30 | 7.25% | $3,402 | — |
The total cost of this buydown is about $11,756 — roughly 2.2% of the price. A 3% seller credit on this home ($15,750) could pay for it and still leave money for other closing costs.
- Good fit: buyers expecting raises, a second income, or who want breathing room in the first two years.
- Not a fit: anyone who can only afford the year-one payment. Year three always arrives.
Step 3: Compare a permanent buydown (paying points)
A point equals 1% of your loan amount. Paying points lowers your rate for the life of the loan. Pricing changes daily and differs by lender.
Example: if one point ($4,988) lowers the rate from 7.25% to 7.00%, the payment drops from $3,402 to $3,318 — about $84 a month. It takes about 59 months (five years) to break even. If you sell or refinance before then, you may not recover the cost.
Step 4: Shop loans and lenders
- Compare FHA, VA and conventional options — they price differently depending on your credit and down payment.
- Ask about down payment assistance programs you may qualify for.
- Get quotes from more than one lender, and compare the Loan Estimates line by line.
Which option is right for you?
| If your priority is… | Consider | Why |
| Less cash at closing | Seller credit | Covers fees you’d otherwise pay out of pocket |
| Lower payment early on | 2-1 buydown | Biggest savings in the first two years |
| Lower payment for decades | Points | Savings last the life of the loan if you keep it |
| Flexibility to refinance | Seller credit or 2-1 | Points pay off only if you keep the loan for years |
Frequently asked questions
If I refinance during a 2-1 buydown, do I lose the leftover money?
Under many programs, unused buydown funds are applied to your loan balance at payoff, but rules vary. Ask your lender how unused funds are handled before you choose.
Can I combine a seller credit and a buydown?
Yes — a seller credit is often the money that pays for the buydown. The total still has to stay within your loan’s seller-contribution limit.
Want real numbers on your situation? Call or text Jesse at (510) 506-3800 or email JesseRivas@KW.com. No pressure — just the information you need to decide.
About the author: Jesse J. Rivas is a REALTOR® with Keller Williams Central Valley (DRE #02282782) serving Lodi, Stockton, Manteca, Modesto and San Joaquin County. He has bought and sold homes himself and works with first-time buyers, move-up buyers, sellers, and homeowners facing financial hardship.
Buying in 2026 series: Part 1 — Buying When Rates Are Above 7% • Part 2 — How to Lower Your Mortgage Payment • Part 3 — Marry the House, Date the Rate
Sources: Freddie Mac PMMS (Oct 1, 2026); Redfin seller concession data (2026). Payment examples are illustrations only, not a loan offer, rate quote, or financial advice. Jesse Rivas is not a lender or financial advisor. Confirm rates, program eligibility and seller-contribution limits with a licensed mortgage professional.
Part 1: Should You Buy a Home When Mortgage Rates Are Above 7%? What Lodi and San Joaquin County Buyers Should Know
Posted on October 9, 2026 Leave a Comment
Quick answer: Mortgage rates averaged 7.28% for a 30-year fixed in early October 2026, about a point higher than a year earlier. But high rates have pushed many buyers to the sidelines, which has given the buyers who remain more negotiating power — including seller-paid closing costs and rate buydowns. Whether buying makes sense depends on your payment comfort, savings, and how long you plan to stay, not on the headlines.
Where are mortgage rates right now?
According to Freddie Mac’s weekly survey released October 1, 2026, the 30-year fixed rate averaged 7.28%, up from 7.03% the week before and 6.34% a year earlier. It is the first stretch above 7% since early 2025.
That average assumes 20% down and excellent credit. Your actual rate depends on your credit score, down payment, loan type (FHA, VA, conventional), and whether you pay points. On a loan of about $500,000, every 1% change in rate moves the monthly principal and interest by roughly $300 or more.
Why do buyers have more leverage when rates are high?
When rates rise, fewer buyers can or will move forward. Fewer buyers means more homes sitting longer, and sellers who need to sell start competing for the buyers who are left.
- Redfin reported that nearly half of US home sales in August 2026 included a seller concession — the highest August share on record — and described August as the strongest buyer’s market in its data going back to 2013.
- In San Joaquin County, Zillow’s late-spring 2026 data showed about 48% of homes selling below list price.
- Not every market is the same. Redfin noted San Francisco remains one of a handful of seller’s markets, which is one reason many Bay Area buyers are looking at the Central Valley.
In 2021 and 2022, many buyers waived inspections and paid over asking just to be considered. Today, a well-prepared buyer can often negotiate repairs, credits, and price. That is a real advantage, even at a higher rate.
What can buyers negotiate for in this market?
| Ask for | What it does | Best for | Keep in mind |
| Credit toward closing costs | Lowers cash needed at closing | Buyers short on cash | Loan programs cap seller contributions |
| Temporary rate buydown (2-1) | Lowers payment in years 1–2 | Buyers expecting income growth | Payment rises in year 3 |
| Permanent rate buydown (points) | Lowers rate for the life of the loan | Buyers staying 5+ years | Break-even often takes years |
| Repairs or price reduction | Lowers cost or future expenses | Homes needing work | Price cuts change the payment only modestly |
Part 2 of this series walks through each of these with real payment examples.
Is buying right now right for everyone?
No. If the payment only works in a perfect month, or if closing would drain your emergency savings, waiting is a smart choice. A home comes with repairs, taxes and insurance that renters do not carry.
But if you can comfortably afford the payment today, it is worth comparing what waiting could cost you. Part 3 covers that, along with the popular saying “marry the house, date the rate.”
How do I know if buying makes sense for me?
- Know your comfortable payment — the number that still leaves room for savings and life.
- Get pre-approved so you know your real rate and loan options, not the national average.
- Count your cash to close, including down payment, closing costs and a cushion.
- Decide how long you plan to stay. Five years or more makes buying, and buydowns, easier to justify.
- Look at real homes and real numbers in Lodi, Stockton, Manteca or wherever you want to live.
Frequently asked questions
Will mortgage rates go down in 2027?
No one can say for sure. Rates move with inflation, the economy and the bond market. Plan around a payment you can afford today, and treat any future drop as a bonus.
Are sellers in Lodi paying buyers’ closing costs?
Many are willing to, especially on homes that have been on the market for a while. It depends on the home, the price point and the seller’s situation, so it is negotiated one deal at a time.
Is it better to rent until rates drop?
Sometimes. If buying would stretch you, renting is reasonable. If you can afford to buy now, compare a year of rent and possible price increases against the chance of a lower rate later.
Want real numbers on your situation? Call or text Jesse at (510) 506-3800 or email JesseRivas@KW.com. No pressure — just the information you need to decide.
About the author: Jesse J. Rivas is a REALTOR® with Keller Williams Central Valley (DRE #02282782) serving Lodi, Stockton, Manteca, Modesto and San Joaquin County. He has bought and sold homes himself and works with first-time buyers, move-up buyers, sellers, and homeowners facing financial hardship.
Buying in 2026 series: Part 1 — Buying When Rates Are Above 7% • Part 2 — How to Lower Your Mortgage Payment • Part 3 — Marry the House, Date the Rate
Sources: Freddie Mac Primary Mortgage Market Survey (Oct 1, 2026); Redfin seller concession report (Sept 18, 2026); Zillow San Joaquin County market data (May 2026). Payment examples are illustrations only, not a loan offer, rate quote, or financial advice. Jesse Rivas is not a lender or financial advisor. Confirm rates, program eligibility and seller-contribution limits with a licensed mortgage professional.
Recent Comments