Don’t Time the Market – Buy Now and Refinance Later

In a recent survey, many potential homebuyers cited today’s interest rates as their main drawback to buying right now and they felt that waiting for them to “go back down” was in their best interest. However, without a crystal ball, there’s no way to tell how long that will take, or how low rates will actually go. 

What we do know is that waiting to buy can have many negative consequences like loss of wealth creation through equity, creating stability and security, providing community and sense of belonging. Not to mention lifestyle changes, schools and amenities are all put on hold waiting for that magic interest rate. So, how do we help clients get past this roadblock and into the mindset of moving forward?

Consumers want to feel like they’ve made good financial decisions based on their own terms. Unfortunately, many people have been conditioned to believe interest rates would always be in the 3’s and that taking anything higher is not financially sound. So how do we get them past this? 

Here are a few ideas to help spark a conversation.

  1. Show them historical rates throughout the decades. Seeing average rates in the 70’s, 80’s, 90’s and 2000’s may help show what they saw in 2020 and 2021 was not the norm and should not be used as a benchmark.
  2. Talk to them about the opportunity cost lost by not moving now, such as rising rents, loss of equity creation and wealth building.
  3. Buyers are not tied to their rate forever (unless they really want to be!). Loans in Illinois do not have prepayment penalties so borrowers can refinance at any time. Your Key Mortgage loan officer can educate your client on options available, including no-cost refinancing options later on down the road. 

The key to breaking perceptions is education — educate clients on options best suited for them by giving them a roadmap to follow. This will  take the uncertainty out of an uncertain landscape, and demonstrate your value and leadership. Yourself and your team at Key Mortgage are their trusted advisors.  If you would like to discuss ways we can partner together or have any questions, reach out to a Key Mortgage loan officer.