HUD Articles

As a real estate agent, a basic duty is to look out for the best interests of our clients.  We also want our clients to be happy, not just with the purchase they've made, but also with the service that we provide them.  Due to the recent trends in home buying, particularly higher interest rates, it has been very difficult of late for buyers to find homes that fit their budget.  However, many buyers have found that they have no choice but to look for and purchase a home.  Our job is to make this as painless as possible. However, we must careful not to overpromise on something that we cannot deliver on, particularly something that we have no control over.

There have been some who have encouraged their buyers to move forward with a purchase with the idea that they can simply refinance to a lower rate at a later date.  While it is true that interest rates fluctuate over time, we must be careful in making such a recommendation.  The main reason is because we have no idea specifically when or if the market will make a shift downard in interest rates.  A number of other factors to consider: will the rate go low enough to meet the buyers needs?  Will it happen when the buyer needs it to happen, particularly in connection with a major life event (i.e. child's wedding, debt payoff, etc)? Will a lower interest rate happen at a time when the buyer still has adequate equity in their home?  What if the rate bottoms out along with their equity?  

There is no doubt that purchasing a home, in the very long run, is a sound, neccessary and reasonable investment.  However, as real estate professionals, we must avoid making predictions and providing timetables by making the blanket statement to "just refi when the rates go down".  We could be overpromising on something that can't be delivered.