top of page

Buy Now and Refinance Later? What The Experts Think.

High interest rates have many Americans asking themselves if they should buy a home now and

refinance later, or wait until rates fall. Here is what some real estate and mortgage professionals think.

Couple standing in front of house with "open house" sign, looking at the spec sheets on the home for sale.

"Only the mortgage rate, can be renegotiated. Once a home is purchased, you

can't renegotiate the price." So if a home is attractively priced, it would be

better to pull the trigger than if mortgage rates are attractive and the home

price is high.

Robert Johnson, a professor at Heider College of Business

People who buy when interest rates are high have the advantage of less

competition and greater negotiation power. "Many homebuyers will potentially

refinance their 15 or 30-year mortgages more than once, so they have an

opportunity to build equity and wealth."

Afifa Saburi, a senior researcher at Veterans United Home Loans

It's hard to consider mortgage rates in a financial decision when it's unclear which direction they

will move. "Typically, the rule of thumb is that one wouldn't finance unless the new mortgage rate

to lock in is at least 0.75% to 1% lower than the established rate.

"The Fed has jawboned exhaustively about their intention to keep rates at present levels once

their hiking campaign is over, but if the U.S. enters a recession, it's not at all clear that they won't

drop rates. That's been their playbook since the Greenspan era."

Peter C. Earle, an economist at the American Institute for Economic Research

"Home prices in Virginia were up 3.7% year-over-year in June. At the same time, the number of

homes sold fell 18.8% and the number of homes for sale fell 21.6%. The scarcity of homes in hot

markets like Richmond, Roanoke, and Winchester make these seller's markets."


"In spite of higher mortgage rates and a seller's market, if the right home becomes available in the

right location, you should buy if it is within your means. It is far more likely you'll be able to sell

the home for a higher price in the future if the location is prime."

Chuck Vander Stelt, Quadwalls

Some experts also advise that if you are able to pay down the principal on a high mortgage rate until you can refinance for a lower rate, regardless of the price you've paid for the home, you can save tens of thousands of dollars on your loan.

If the right house became available, and you had to pay more than you'd thought, would you go ahead and pull the trigger on the purchase? Let us know in the comments.

We think it is also worth noting that one way you can reduce your costs of owning your home is by insuring it with Mutual Assurance. With our perpetual policy, you'll pay more your first year, but then pay an average of 50% less on home insurance than with another provider each year after. If you aren't already a member, get an estimate today to see how much you can save over the next 5 years.



Sources: CBS, Quadwalls, Redfin



Rated 0 out of 5 stars.
No ratings yet

Add a rating
bottom of page