“Marry the House, Date the Rate”: Innovative Mortgage Deals Attracting New Homebuyers
Some lenders are offering creative mortgage deals to encourage buyers to purchase a house amid the combination of high home prices and elevated mortgage rates. These deals come with a promise of free refinancing in the future if rates drop, with the selling point summarized by the slogan, “marry the house, date the rate.”
Historically High Mortgage Rates
Despite a slight retreat in November, mortgage rates remain historically high, with the average rate on a 30-year fixed-rate mortgage at 7.22% as of December 2023, according to Freddie Mac. The last time rates were this high was two decades ago. This has prompted lenders to find new ways to attract buyers and drive business as demand stagnates. In October, the sale of previously owned homes fell to a 13-year low, as reported by the National Association of Realtors.
Potential Downsides for Homebuyers
For those ready to buy a home, it might seem logical to lock in a free, future refinance deal. However, there are some considerations to keep in mind. First, there is no guarantee that rates will drop any time soon. Additionally, if housing values fall and the loan amount is higher than the market value of the house, the lender might require cash to offset the negative equity.
Buyers should base their decision on their current finances and feel comfortable making payments at today’s rates, even if they do refinance in the future. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors, explained that while rates may lower, the best financial move for buyers may depend on how long they plan to own the home and the closing costs of the refinance.
Advice for Buyers: Read the Fine Print
Real estate investor Brad Smotherman advises buyers to ensure they are working with a reputable company. The financing process involves stacks of paperwork that can easily hide crucial details. Buyers should proceed with caution and read the fine print before committing to any mortgage deal.
For more information on these innovative mortgage deals, visit Florida Realtors.
Orginal article: Link To Article – provided by Kansas City Realtors
Each Office Independently Owned and Operated 
