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When mortgage rates began to rise in 2022, Americans responded by buying fewer homes. Much of the housing industry began using the phrase “marriage your house and rate date” in an attempt to spur the disgusting buyers to abandon their fears.
“Marriage to a house” and “price date” meaning
This motto was popular during the post-pandemic era of rising rates. It is colloquialism in contrast to the relative permanence of owning a home. After all, it has long been a common practice for homeowners to refinance when mortgage rates fell.
I’m going to marry a house
“Home and Marriage” is a simple concept. Find your dream home and live happily ever after. This part of your purchasing strategy focuses on finding a home you love. A study from the Harvard Housing Research Center found that homeownership may be as permanent as an actual marriage, or as unbearable as an actual marriage. Anyway, you don’t have to stay home forever, but you have at least a few years of commitment.
Rate date
While you develop an emotional connection with your home, the same thing doesn’t apply to your mortgage. It’s just financial stuff. Dating analogies are somewhat appropriate. You can stick to a mortgage for months or years, but once something gets better, you can break up your old mortgage and move on to a new one. Luckily for borrowers, refinancing a mortgage is less troublesome and heartbreaking than abandoning a romantic companion.
Is “married a house and date is rate” still good advice on today’s market?
Although fees fell below 3% for a short period during the pandemic, the transaction was so intriguing that many people couldn’t forget the very cheap money moments. As a result, home sales plummeted to some of the lowest levels in years. Given the background, “Marriage your house and rate dates” is a useful advice.
Warning: You should not bank that your home will increase and your mortgage fees will be lowered. Home prices are setting records one after another, but it is possible that they have entered a more calm period of gratitude. Mortgage fees are particularly unpredictable. Housing economists expect mortgage interest rates to fall gradually, but there is no guarantee.
Vishal Garg, CEO of mortgage lender Better, is a supporter of the “marriage home and date fees” strategy.
“The first question is, have you ever found a home you love? Second, can you fund the home you love? Garg says. “If that’s the case, you’re getting the opportunity to buy future refinance options and significantly reduce your home costs.”
The first question is, have you ever found a home you like? Secondly, can you fund the house you love at a price similar to what you pay with rent? ”
-Vishal Garg
CEO, Better.com
Garg created some of the “price dates” of his company’s strategy. Better will fund purchases at the company and reduce closure costs to home buyers who will fund better refinances in the future.
That’s important because closing costs can make refinance a bad deal. However, in some cases, you can refinance without a title premium or valuation. “That means you can do near-zero cost refi,” Garg says.
In that case, even a slight drop in mortgage rates can trigger borrowers to play the field. Let’s say you’re getting a $400,000 loan at 7% for your monthly principal and $2,661 interest payments. If the fee drops to 6.25%, your new payment will save $2,463 or $198 a month.
If the closing costs are $4,000, you’ll be breaking the refinance costs in 20 months.
When is it clever to “marry a house and go on a fee date”?
When you marry a house and go on a date with a rate,
- You can afford to buy your favorite home at today’s rate
- You expect to stay at home for at least 3-5 years
- Your monthly rent is comparable to what is expensive to own a home
- You can refinance yourself with a mortgage that will cover title insurance exemptions, valuation exemptions, or other discounted closure costs
When should you avoid marrying a house and going on a date with fees?
On the other hand, this strategy may not benefit you if:
- You can’t find a home that meets your needs within your budget
- I think you’ll be moving in the next 3-5 years for work or family reasons
- Your monthly rent is much cheaper than your monthly mortgage payment
- You live in states like Florida and New York, where you collect taxes on refinancing.
Alternate “Marriage and Fee Date” approach to “Marriage and Payment Date”
Are you still not sure if this is the right strategy for you? Here are a few different approaches you want to consider:
- Wait for the price to drop: The main drawback here is that home prices can rise while waiting.
- I’ll take it out Adjustable mortgage (arm): These loans allow you to get a lower mortgage rate without refinancing, but the weapons are at risk of rising rates in the future.
- Mortgage Point Payment: If you decide to buy from home, you can purchase discount points from your lender when you close. These can often lower interest rates, which increase by 0.25% per mortgage point.
