“It’s helping people to kind of ease into that higher payment, with the goal being to refinance before they get to the full payment,” he said. “We don’t have a crystal ball, but that’s a good strategy right now to help make it more affordable.”
Another tool brokers use to overcome potential buyers’ hesitation is to explain how much net worth they’re losing, or at least delaying, by continuing to wait.
“We talk to them about the amount of wealth that they can build by buying a home, especially compared to being a renter,” Baxter said. “Instead of being so focused on what the rate is, ‘What’s the payment compared to your rent? What does that look like? If you project it out for 5 or 10 years, as far as your net worth compared to renting, you’re going to be way better off.’ So when they can look at those kinds of numbers, it takes that focus off what the interest rate is.”
Lowest cost of money
Rather than focusing on the mortgage rate, Baxter explains ways to structure the loan that could save the borrower money. In many cases, buyers don’t understand things until they’re explained to them.
“It’s not just the rate, it’s the lowest cost of money,” he said. “I talk about that a lot with people. What’s the lowest cost of the money? You know, points versus no points. What term to look at, how to allocate seller concessions. What’s your strategy after closing to manage the mortgage? Things like this are super important.”