When someone is buying a home they generally don’t want to have to go through that process multiple times. Thus, the common phrase “marry the house”. Buyers often buy a house with the intention of living there long term, or at least for an intermediate term.
As you get older, you really don’t want to move. Personally, I’ve done it three times and I’m probably going to move one last time to downsize at some point. As a mortgage professional, I know the process itself involves a lot of work and the stress involved in it is real. That’s why when someone comes to us for a police home loan, we strive to take as much work and stress out of the process as possible.
From a practical standpoint, I think when you find the home of your dreams you’re likely to stay there long term, maybe even for the rest of your life. That’s when the other part of the common phrase comes in: “date the rate”.
As far as interest rates are concerned, rates always change. When you “marry your home” you will probably want to shorten the loan term at some point. In some cases that is putting more toward your minimum monthly payment on a regular basis if you have a 30-year fixed mortgage. In other cases that may be to refinance to a 15-year fixed mortgage when household income is higher and rates are lower.
I think what’s going to happen later in 2025 is that rates will come down. We still might be in for some short-term pain this year. The question becomes how can Police Mortgage get you into that dream home when it’s available without you having to sweat the monthly payment. That’s a situation where we may need to “date the rate” with a look at what we can do later when rates fall.
Our parent company, National Police FCU, has been advocating for thrift and wise money management for over 80 years. So, we work with clients to take a 30-year mortgage situation and possibly take six or seven years off of that. If you can bring that mortgage down to a 15 year the interest that you would save in that scenario would be significant.
I’ve been in the mortgage business since the early 90’s. Back then a short mortgage term was really the big way to go. You need to give clients a mortgage payment that they can afford but also suggest the best long-term scenario for them.
Today we have a whole new generation of home buyers who have seen super low rates for 30-year mortgages. That ship has sailed after a two to three-year period of higher interest rates.
Despite the market, family needs change and some people need to decide if they can continue to just rent a place. Some people just have to buy. They have an expanding family and they need to move regardless of where rates are.
So, you “date the rate” because you know that at some point you’re going to have an opportunity to bring your payment down by refinancing that mortgage. That’s why it’s important to diligently make that monthly payment, not take any of the equity out of the property, and possibly even put a little extra money towards the principal.
Let’s say you’re at the point where you’ve paid a little bit into the principal and rates drop. Now you can look at a shorter-term loan. When you “marry the home and date the rate” with a wise-money-management approach you can create some flexibility for yourself in the future.
Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, go to www.policemortgage.com or call 312-499-8878.
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