Does waiting for the right time to buy a home make economic sense?

If you’ve been thinking about whether you should purchase a home, you might want to think about applying with a lender. This helps to get a read on where you are financial picture. If you’ve been thinking about purchasing a home, but you’re just not quite sure yet here are some things to consider…

 

What type of home do you want versus what type of payment?  The house could be a mid-tier home or perhaps even a starter home to get your foot in the door as a launchpad for future real estate success. Anyone successful in real estate will probably share buying a home and holding it for the long term is how they accumulated their wealth. For example, let’s say today you can purchase a home for $800,000 and the mortgage payment based on your down payment is $4500 a month.

Your budget supports the payment of more than $4000 a month payment. Interest rates are in the 6% range presently and climbing. Higher rates can diminish your borrowing power, but housing prices also tend to be a little bit more negotiable. As a result of this relationship if your target is $4000 a month, and you know that an $800,000 house you could probably negotiate down to at least $750,000 most likely depending on how it’s listed, the area the location, etc. That $800,000 house is now $750,000. $50,000 of spending power on average is about $250 a month of payment. So maybe your target at $4000 a month is not attainable but $4250 a month in that range is attainable considering that you can negotiate on the house.

If you’re in the neighborhood of buying an $800,000 house and if you can’t absorb an additional $250 a month based on your budget, you probably shouldn’t be buying a house. You should go back to saving or working on your financial situation to better your finances. However, the value of buying a home today means you can get a fair price on a house. This has been brought on by the higher interest rates which have reduced competition. As a byproduct of this shift in the market, you can negotiate on a house and have a great price on the house with a temporary interest rate. Knowing the interest rates are cyclical and there certainly will be an opportunity to refinance that 6% mortgage for example by .75% to 1% lower in rate in a few years anyway. A .75% to 1% reduction in your interest rate on a $750,000 house price is probably going to result in a payment difference of about $400 a month.

So putting the whole big picture together your $800,000 home is now $750,000 because you have a great real estate agent who negotiated for you. Your payment is $4250 a month, and it’s temporary until interest rates drop at which point your payments could go as low as $3,600 to $3,700 a month. Based on an approximate 1% reduction in interest rates in the next 1.5 – 2 years which is probably a fair bet.

By and large, when you buy a home and get a lower price on the home you also lock in your property taxes as well. The benefit of locking in your property taxes is that you’re not paying taxes at an inflated price. Since you didn’t have the competition to bid up the house in the first place, it allows you to have a lower fixed cost that generally remains permanent. While at the same time affording you the ability to change out the variable which is the interest rate on your fixed-rate mortgage. Working with a quality mortgage professional who can accurately articulate all the pros and cons to present market conditions as it relates to your finances is your best bet.

If you’re looking for a mortgage to get pre-qualified for a home or just want to understand what you can afford start today by getting a  no-cost loan quote!

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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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