Given the high-interest rate environment that we are in, there has been a boatload of REALTORS who keep repeating “date the rate, marry the house”. What they mean is to take on a higher interest rate right now so you can get the home you love, with the expectation that you can refinance when mortgage costs drop.

While on the surface that may seem like good advice, it’s not for everyone.

Who Should Date the Rate?

If you know that you’ll be selling and moving on in the next 3-5 years, you should definitely date an adjustable-rate mortgage. Why adjustable? Because the initial payments are currently lower than those with a fixed 30-year rate. You’ll be out before you need to switch to permanent financing.

Cons of dating the rate

What many agents don’t explain is that there is more to it than “you can refinance later”. Refinancing comes with costs and some of them can be surprising. Owners basically have to re-qualify for their mortgage (because it was so fun the first time around, right?). That includes paying for an updated appraisal, closing costs, and proving that you are still financially able to afford the monthly note.

If you don’t qualify or don’t have the funds for the refinance, what happens? Your relationship status has changed from dating to married…to an interest rate you thought was just a quick fling.

Our advice

Talk to your lender about the financing options available to you and have them explain IN DETAIL the pros and cons of them so you are making the most informed decision you can.

Need a referral to a great local lender? Just ask. We’ve got a whole list of them.