Some opportunities worth exploring before the end of the year: buying a home while you have more negotiating power, and accessing the equity in the home you already own without giving up your low mortgage rate.
As we head into the final months of 2026, I’ve been having two very different conversations with my clients.
Some are wondering whether they should buy now or wait until mortgage rates come down. Others already own homes, have fantastic interest rates of 2%, 3% or 4%, and need access to cash but don’t want to refinance their existing mortgages.
The good news is that there are strategies for both situations. And sometimes the opportunities are ones you might not have considered.
1. Why Buying Before the End of the Year Could Make Sense
Everyone loves a low interest rate. But there’s more to buying a home than the rate on your mortgage.
One of the advantages of shopping during the fall and winter is that you may face less competition than during the busy spring buying season. Sellers who have had their homes on the market for a while may also be more willing to negotiate.
That creates opportunities to ask for seller credits toward closing costs, negotiate repairs or potentially have the seller contribute toward a temporary interest rate buydown.
A Story: The Buyer Who Negotiated a Seller-Paid Credit
Imagine you’re purchasing an $800,000 home with 10% down. Instead of reducing the sales price by $15,000, the seller agrees to provide a $15,000 credit toward your closing costs and an eligible temporary rate buydown.
That credit could reduce your upfront cash requirements or help lower your mortgage payments during the first couple of years, depending on how the financing is structured.
And if rates eventually decline enough to make refinancing worthwhile, you may have another opportunity to improve your payment.
The key is understanding all your options before you make an offer. A lower purchase price, seller credit and interest rate buydown each have different financial benefits.
Remember: You can potentially refinance your interest rate in the future, but you cannot go back and renegotiate the price or terms of the home you purchased.
2. What the Numbers Are Telling Us
THE HOUSING MARKET | SEPTEMBER 2026
7.03%
30-year mortgage rate, September 24
4.9 months
National housing inventory in August
More available inventory can give buyers additional negotiating room. However, desirable homes in Sonoma County can still attract competing offers.
I don’t expect anyone to have a crystal ball when it comes to interest rates. Recent increases are a reminder that waiting for lower rates doesn’t guarantee they’ll arrive on your preferred schedule.
My approach is to look at today’s financing, negotiate where possible and make sure a purchase works financially even if refinancing isn’t an option for several years.
3. Love Your Low Mortgage Rate? You May Not Have to Give It Up to Access Your Equity.
If you purchased or refinanced your home a few years ago, you may be sitting on two valuable assets: significant home equity and an incredibly low first mortgage rate.
But what happens when you need money for a major expense?
A cash-out refinance isn’t your only option. A second mortgage or home equity line of credit can potentially provide access to your equity while leaving your existing first mortgage completely untouched.
And depending on the program, you may qualify using traditional income documentation, bank statements or other qualifying income sources.
Here are three examples of how that might work.
ILLUSTRATIVE EXAMPLE 1
Building a Granny Unit Without Refinancing Your Home
Imagine a couple who bought their home several years ago and locked in a 3% mortgage. Their property has appreciated, and they’d love to build an ADU for an aging parent or potentially generate rental income.
They need $150,000 for construction but don’t want to replace their low-rate mortgage with a substantially higher-rate loan.
One possible financing structure:
Their original 3% mortgage remains in place.
Existing first mortgage: 3.00%
Existing balance: $400,000
New second mortgage: $150,000
Fixed second mortgage rate: 7.99%
Loan term: 30 years
New second mortgage payment:
$1,099.86/month
Principal and interest, excluding fees.
The new second mortgage would add approximately $1,100 per month, allowing them to finance their ADU while preserving their existing low-rate first mortgage.
ILLUSTRATIVE EXAMPLE 2
Consolidating High-Interest Debt
Consider a homeowner with $60,000 in credit card balances, some carrying interest rates above 20%. They have substantial equity in their home and a first mortgage at 3.25%.
A fixed-rate second mortgage could allow them to consolidate those balances into one much lower overall payment and lower interest rate without touching their first mortgage, while significantly reducing the amount of interest and monthly obligation, freeing up cash flow and potentially helping the household begin to save again.
The objective is to compare the total cost of the new loan against their current debts, including fees and the repayment term.
ILLUSTRATIVE EXAMPLE 3
Using Equity During a Major Life Transition
Divorce, an unexpected family expense or a change in employment can create a need for cash at a time when homeowners would prefer not to sell.
For example, someone going through a separation may need $200,000 to buy out their spouse’s share of the property, allowing the spouse holding the property to keep the tax basis and low first mortgage while allowing the spouse receiving the payout the opportunity to potentially get into their own property and start to build equity again in a market that may provide an excellent opportunity for negotiation and getting into property at a good price—something that was hard to do during Covid when interest rates were super low and offers were multiple.
4. A Fixed Second Mortgage or a HELOC?
There isn’t one solution for everyone. It depends on how much money you need, when you need it and how you intend to repay it.
Fixed-Rate Second Mortgage
- Receive a lump sum
- Predictable fixed payments
- Useful for known, one-time expenses
- Generally repay principal and interest immediately
Home Equity Line of Credit
- Draw funds as needed
- Often a variable interest rate
- Useful for projects with expenses over time
- May offer interest-only payments during the draw period
Both options generally allow you to preserve your existing first mortgage. Both also use your home as collateral, and rates, fees and qualifications vary.
5. My Approach: Shop the Financing, Not Just the Rate
Whether you’re purchasing a home, building an ADU or accessing your equity, my job is to help you understand the available options and how they fit your long-term plans.
As an independent mortgage broker, I can shop multiple lenders and compare different programs, including options that may not be available through your existing bank.
For homebuyers, that means coordinating with your real estate agent on offer strategies, seller credits, down payment options and closing timelines.
For existing homeowners, it means comparing fixed second mortgages, HELOCs and alternative documentation programs rather than automatically assuming a cash-out refinance is the answer.
And if your income is complicated because you’re self-employed, retired or own multiple properties, there may be financing solutions worth exploring.
One More Reason to Plan Ahead: Year-End Tax Opportunities
As we approach the end of 2026, it’s also a great time to have a conversation with your CPA about how your real estate decisions might affect your taxes.
Whether you’re considering purchasing a primary residence, investing in a rental property or tapping into your home’s equity to build an ADU, there may be tax benefits worth exploring before December 31.
For some buyers, closing before year-end could mean qualifying mortgage interest, points or property tax deductions. For investors, having a rental property ready and available to rent before December 31 may open the door to eligible deductions for 2026.
And for homeowners who already have a fantastic low mortgage rate, using a second mortgage to make substantial improvements to their property may offer another potential benefit: deductible mortgage interest without replacing their existing first mortgage.
The key is coordinating your mortgage strategy with your tax strategy.
I can help you explore the financing options, compare lenders and structure a loan that fits your plans. Your CPA can help determine which tax benefits apply to your specific situation.
If you’ve been considering a purchase or a major home improvement, now is a great time to get those conversations started rather than waiting until December.
Let’s Make a Plan Before the Holidays
If you’re considering buying before the end of the year, I’d be happy to run the numbers and help you understand what opportunities may be available.
And if you already own a home and need access to equity, let’s see whether we can put some of that equity to work while preserving the low first mortgage rate you’ve worked so hard to secure.
Sometimes the answer isn’t a new first mortgage. It’s simply finding a better way to use what you already have.