Move your mortgage rate, The cost of Greek life

#RealEstate, #MortgageRates, #HousingMarket, #GreekLife, #PersonalFinance

Description:

Welcome to Coffee With Real Estate, the podcast where we brew up insightful discussions on the housing market and beyond. Hosted by Susan and produced by the ever-awesome Kurt, each episode dives into the complexities of real estate decisions while sprinkling in some fun, relatable topics. Whether you're a homeowner, a renter, or just curious about the market, this show offers practical advice and a fresh perspective to help you navigate the world of property ownership.

In this episode, Susan and Kurt tackle the "lock-in effect" that’s keeping homeowners tethered to their low mortgage rates. With rates as low as 2.75% a few years ago, many jumped into the housing market, only to find themselves hesitant to move now that rates have climbed to over 6%. The hosts explore creative solutions for homeowners facing analysis paralysis, such as renting out their current home to keep the low rate, recasting a mortgage, seeking assumable mortgages, or opting for a rate buydown. Each option is dissected with expert insights, weighing the pros and cons to help listeners make informed decisions.

Renting out your home might seem like a no-brainer to preserve that sweet low rate, but Susan cautions against overlooking the challenges of being a landlord—especially if you’re relocating far away. With median home prices around $440,000, the episode highlights the importance of having enough cash for a down payment on a new home while managing the financial risks of rental properties, like unexpected repairs or unreliable tenants. Susan and Kurt break down how rental income could offset higher mortgage payments on a new property, but they stress the need for realistic expectations and solid financial planning.

The discussion also covers mortgage recasting as a way to lower monthly payments without refinancing, using equity from a sold home to reduce the principal on a new loan. Assumable mortgages are another intriguing option, though they come with challenges like covering the gap between the sale price and the existing mortgage balance. Susan and Kurt also touch on rate buydowns, where lenders or sellers temporarily lower your rate, offering a short-term reprieve that could make a higher-rate mortgage more palatable until refinancing becomes viable.