Common Sen$e: Marry the House but Date the Rate

ART WOOD

We are living in some interesting times. House prices are near their peak and interest rates jumped up to peaks we haven’t seen since the Great Recession. I get asked every day for advice on the best way to navigate this craziness. I heard it put this way over the weekend, and it made a lot of sense: “Marry the house but date the rate!”

What that means to me is that you have personal ties to a house. That is where life and memories happen. It is a long-term solution which will always go up if you stay there long enough. When it comes to buying a house, it is either driven by need or by emotion, and sometimes both. People will continue to be relocated. They will get divorced. Their families will grow, or they will shrink. For all these reasons, it is always a good time to buy a house.

On the flip side, rates do matter, but maybe less than you think. I am a big proponent of buying below your means. An interest rate is just a multiplier that helps you determine what monthly payment you are comfortable with. I get it! Talking about rates in the sixes and sevens stinks when we had rates in the twos less than a year ago, but you will drive yourself crazy thinking about that.

Whenever you buy a home, you first sit down and come up with a budget that you are comfortable with. What payment will let you sleep well at night knowing that you didn’t overextend yourself? With that info in hand, you call your favorite mortgage professional and determine how much you can borrow and stay at or below that number. Then you add to that number the cash you want to invest in a house, and, voila, you know what price house you are looking for. Notice, not once did I ask you to discuss a rate. As I said above, that is just a means to get to the payment you can afford. It works the same with investment properties, except for the fact that you are comparing cash flowing properties. The thing I keep saying about interest rates is that they are cyclical and can be temporary. Yes, rates are as high as they have been in fifteen years, but you are not tied to the rates. Economists can do their job and predict where rates will rise or fall, but at the end of the day, it is just a guess. Most seem to think that we will settle in

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somewhere in the fours eventually, and that the economy will not be able to operate effectively with rates where they are today. That is where it is very beneficial to have a relationship with your mortgage professional. We monitor the rates on a consistent basis and look for opportunities to save our past clients’ money!

If that need or desire pops into your head, don’t let the negative news that surrounds us influence you. Take a systematic approach to it and make the decision that is best for you and your family. Marry the house but date the rate!

ART WOOD (NMLS #118234) is the branch manager of The Art Wood Mortgage Team of Goldwater Bank, located at 2341 Main Street in downtown Tucker. “Tucker’s Mortgage Guy” for sixteen years, he is a former Tucker Tiger (Class of ’92), and co-founder and organizer of Taste of Tucker. Family guy, community guy, and definitely not your typical mortgage guy - it’s all that he does that makes Art Wood who he is. Contact him at 678.534.5834 or art.wood@goldwaterbank.com.