“Marry the House, Date the Rate” — Is It Good Advice for Central Texas Homebuyers?
Should you buy a home now at a 7.4% mortgage rate or wait for rates to drop? For homebuyers in Kyle, Buda, San Marcos, and throughout Hays and Caldwell counties, the answer may surprise you.
The strategy known as “Marry the House, Date the Rate” means buying a home you can comfortably afford today and potentially refinancing if mortgage rates fall in the future. But waiting has risks, too.
How Much Can a 1% Rate Drop Save You?
On a $300,000, 30-year mortgage, the estimated principal and interest payment is about $2,078 per month at 7.4%, compared with $1,878 at 6.4%. That is approximately $200 in monthly savings.
A 1% rate drop can also increase purchasing power by roughly 10%, depending on the starting rate and your financial qualifications.
But here's the catch: When rates fall, thousands of buyers who were waiting may return to the market. Increased competition can trigger bidding wars and push home prices higher.
For example, imagine a $350,000 home today at 7.4%. If you wait for rates to fall to 6.4%, but competition drives the home's price up by $30,000, your lower interest rate may barely reduce your monthly payment.
The lesson? A lower mortgage rate does not automatically mean a better deal.
Should You Buy Now or Wait?
The right decision depends on your budget, the home you want, and the opportunities available today. Seller-paid closing costs, mortgage rate buydowns, and builder incentives may help make buying more affordable.
Never purchase a home you cannot comfortably afford today based on the hope of refinancing tomorrow. Refinancing is never guaranteed.
Let's Run the Numbers for Your Situation!
I'm Allen Deaver of Asset Realty, helping buyers throughout Kyle, Buda, San Marcos, and Hays and Caldwell counties.
Call or text Allen at 512-791-4543 before you decide to wait for lower rates. Let's compare your options, explore available homes, and see whether buying now could put you in a better position financially.
