Can you afford to buy a house?  Or can you afford NOT to?


Right now, you are probably hearing people talk about housing affordability.  Soaring home values over the past couple of years, coupled with recently increased interest rates, are making it harder for would-be home buyers to obtain the American Dream.  If this sounds like your story, then let’s talk about some options that are available to you to help you find a way to purchase a home. You may be able to afford to purchase a home after all.


Let’s start at the beginning – you may be wondering why you should buy a home.  There are plenty of benefits, so let’s explore a few of them.

·        Build wealth through equity

·        Stability for families

·        Your payments each month go toward your wealth, not your landlords

·        On a fixed rate mortgage, your monthly Principal & Interest payment is set (while rents are going up)

·        You can remodel the property to your own tastes

·        Stronger neighborhoods



There are a few things to consider as you determine affordability for your specific situation.  Here are a few considerations:

INTEREST RATE OFFSET:  Although interest rates are higher today than in 2020-2022, the home prices are more stabilized and you will not necessarily have to offer thousands of dollars above the asking price.  This saves you thousands of dollars up front, which could now be reallocated toward the current interest rates.

DISCOUNT POINTS:  If the current interest rates are still an obstacle to overcome, you may be interested in “discount points”  Since interest rates are a big contributor to your monthly payment, you may consider reducing your interest rate by buying down points.  There are two ways to accomplish this.

TEMPORARY BUY DOWN:  This is a great option for someone who wants to ease into the higher monthly payments.  This can only be paid for by the seller, and it doesn’t actually change the interest rate.  However, it does reduce the monthly payment each month for the first few years of owning the property. For example, if your interest rate will be 6% then the first 12 months your payment will be reduced as if your interest rate was 4%, then the next 12 months would be reduced as if your interest rate was at 5%, and then the third year your payments would go up to the full 6% rate monthly payment. 

PERMANENT BUY DOWN:  This can be paid for by the buyer, or it can be paid for through closing cost concessions from the seller.  This is an actual reduction in interest through “pre-paid interest”.  The cost of a permanent buy down is larger than a temporary buy down, however if you plan to remain in the home for a long time without refinancing the home – this could be the best option for you.

ADJUSTABLE-RATE MORTGAGE:  This is also a tactic that allows home buyers to reduce their monthly payment by reducing the current interest rate.  This is a good option for someone who is comfortable with their payment increasing at some point in the future – or for someone who is willing to refinance their loan into a fixed rate mortgage in the future.  This loan type could become problematic for someone who is not good at budgeting and saving due to the potential volatility of the monthly payments.  However, it does reduce the monthly payment in the beginning of the loan for a period of time such as 3 years, 7 years, or even 10 years.



After reading these options, if you are interested in looking into the possibility of home ownership, NOW is the time to talk to a reputable lender and real estate agent.  Your lender will go over the details of each program and how they impact you and your specific situation.  Everyone’s financial situation is different, so it’s in your best interest to do your own due-diligence to see which option may be right for you.

If you live in the North Texas area, our REALTORS would be happy to assist you and answer all of your questions.  In fact, we offer a no-obligation Home Buyer Consultation to help you understand the process and answer your questions.  We hope to help YOU become a happy home owner.  You deserve it!



About the Author

Melissa Hailey is a successful real estate broker in Texas. She is also a certified real estate instructor and the CEO for Agent Advantage Coaching and Training, as well as a Certified Coach for Workman Success Systems.  Her passion for helping REALTORS build their real estate business is evident in all that she does.  The more agents she can help, the more consumers she can impact in a positive way through home ownership.  Connect with her on LinkedIn @melissahaileyrealtor