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You’ve probably heard the homebuying piece of advice “Marry the house, date the rate.” It’s meant to suggest that homebuyers commit to a house, like a marriage, and treat the mortgage rate as something temporary.
Mary Dykstra, partner and owner of MKB REALTORS® in Virginia (and National Association of REALTORS® regional vice president), said catchphrases like that rarely tell the whole story.
“It is also important for homebuyers to realize that refinancing comes with a cost that may not make sense if they only plan to be in their home a few more years,” Dykstra said. “So, in the end, marry the house, but realize the rate is like your live-in uncle — sometimes you just can’t get rid of him!”
Homebuyers might also hear advice about waiting for rates to come down before jumping into homeownership.
Per Dykstra, although today’s rates may seem high, historically they’ve been much higher. “The ‘free money’ rates of the pandemic era may never come again,” Dykstra said.
“Squeaking into a payment is like buying a too-small pair of shoes and hoping your feet shrink to fit,” Dykstra said. “This is of particular concern if buyers are looking at a buydown or adjustable-rate mortgage.”
Plus, waiting on lower rates to buy a home could hamper equity and appreciation. Christina Pappas, REALTOR®, broker and president of The Keyes Company in Miami (and National Association of REALTORS® regional vice president) said that in Florida, many people have waited three years for interest rates to drop while homes continue to appreciate anywhere from 3% to 10% per year.
She explained that some people there say they wished they wouldn’t have waited to buy, as they missed out on that appreciation.