7% Interest or the Black Hole of Rent: Pick Your Devil
Waiting for rates to “drop it like it’s hot”? Make sure waiting isn’t costing you an opportunity.
Stop being blinded by 7%. It’s not necessarily the financial death sentence you’re making it out to be. In the right deal, the market that comes with it could be your ace in the hole.
I understand the hesitation. You remember those low mortgage rates, and now anything higher feels like a bad deal. But while you’re waiting for the rate fairy to arrive, you could be overlooking a home—and a purchase price—that makes sense today.
When higher rates send buyers to the sidelines, motivated sellers have fewer people knocking on their doors. That can create room to negotiate a lower price, closing cost assistance, or other concessions.
And let me tell you something: I’m a seller, and I’m impatient as hell.
That impatience could be your opportunity.
Look past the rate. Look at the buy.
You’ve seen the price cuts. When a home you want gets marked down, run the numbers before you dismiss it over the interest rate.
What can you negotiate? How much cash will you need to close? What will the complete monthly payment be? How does that compare with your rent?
At $1,675 a month, you’re spending $20,100 a year on rent. That pays for a place to live, but it doesn’t give you an ownership stake in the property.
Buying gives you the opportunity to start paying down your own mortgage. Part of each payment goes toward principal, gradually reducing what you owe.
That’s where the long game begins.
Buy the payment you can afford today.
Consider a home priced at $219,900. Could you structure a purchase with a total monthly mortgage payment near your $1,675 rent? Have a lender check the actual numbers.
Your down payment, loan program, interest rate, property taxes, homeowners insurance, and any mortgage insurance all affect the answer. Maintenance and repairs need room in your budget, too.
If the full cost works comfortably—and the home fits your needs—that purchase deserves a serious look.
A fixed-rate mortgage also gives you consistency in your scheduled principal and interest payment. Taxes and insurance can change, but your interest rate doesn’t rise every time the market does.
Then let the future be the future.
Imagine rates rise after you buy. That 7% fixed rate you were worried about might start looking pretty good.
If rates fall, you may have an opportunity to refinance. You’ll need to qualify, and the savings need to justify the costs. A lower rate isn’t a promise, and neither is a higher home value.
So buy a home you can afford with the mortgage you have today. Let a future refinance be a possible bonus.
Waiting can be the right decision when your finances need more time. But waiting only because you’re convinced 7% makes every purchase a bad deal? That deserves another look.
Don’t let one number make the entire decision for you.
Before you renew that lease, look at the homes. Look at the concessions. Look at the complete payment.
The rate gets your attention. Make sure the deal gets it, too.
If you’re considering buying in Aiken County, let’s run the numbers and see what’s possible.
