Love the Home, Rent the Mortgage

The best time to buy is when rates are elevated


Buying a home is no doubt a big decision and not one that people do often in their lives. Having originated close to 2,000 loans, I’ve seen the market swing many times over my career and the financial decisions people make as a result. There is no perfect time to buy a home because no one can perfectly time the market, but what you can control is finding the right home for you. In the mortgage world there is a saying “Love the home and rent the mortgage.” Let’s break down what that means.

During the peak of COVID, we saw the Federal Reserve drive interest rates down into the 2% range in order to stimulate the market and prop up the economy. During that time home values soared so rapidly that appraisals couldn’t keep up with the rapidly rising values. Potential homebuyers were waiving every inspection, waiving appraisals, offering more than list price, getting no money from the seller towards their closing costs and still losing out on their offer. It was a seller’s market because interest rates were so low that overpaying was rampant, but buyers looked the other way due to low interest rates.

Now, owed to too much cheap money introduced during COVID, the Federal Reserve is combating high inflation by making the cost of money more expensive. With the cost of money more expensive, fewer people want to sell their homes to buy a new home because they don’t want to exchange a cheaper mortgage for a more expensive one. There are also fewer first-time buyers in the market during a time of higher interest rates. This dynamic has reduced competition for homes and opened the door for better deals for buyers to include reduced purchase prices and sellers giving money towards buyers’ closing costs. So, what happens next?

Everything we’ve talked about is based on the Federal Reserves’ standard playbook in which every three months they release their projections for the next three years. Based on the most recent projections released in March, the Federal Reserve will ease their benchmark rate by 3% over the next three years by between 0.75% and 1.25% per year, based on how the economy progresses. This doesn’t mean mortgage rates will be 3% lower in three years, but it does mean they will be significantly below where they have been at their peak. Even right now, rates have come down over 1% from their peak last fall. So, you can go back to the beginning of this article if you have forgotten what happens to the real estate market as rates come down – a sellers’ market is coming again.

I don’t expect extremes like the COVID-era market again because rates won’t get that low and there will be more home inventory available because people who have wanted to sell/move will finally have their chance, but competition will grow and deals will go away. So, when is the best time to buy a house? When can you get a better deal but pay more in interest? Or when will you pay more for the house but less in interest? My answer is, “love the house, rent the mortgage.”

Buying the right house now before the market changes gets you into the house you love at a good price but with a higher payment because of interest. The solution is to refinance. Thanks to the Federal Reserve’s playbook, we know that rates will not only decline but significantly decline over the next three years, so if you get a mortgage now, there will be plenty of opportunities to lower your payment over the years. In some states, it is very cheap to refinance while others are more expensive, so determining the break-even point is key. Another option is to do a lender-paid refinance in which the lender pays the refinance costs for you thus removing the break-even. This is done all the time and allows you to refinance more often as rates come down. Regardless of what option you go with, make sure you keep the long-term picture in sight if you’re considering buying a home. By waiting to try to avoid extra interest today is highly likely to cost you a lot more money in the long run.

I and Trident Home Loans are always to help, whether it’s doing your loan or just offering advice. So please, feel free to contact me with any questions at or on my cell phone at 850-377-1114. I’m always happy to help a fellow pilot navigate the mortgage process. Also, to further understand the process, review previous articles on pilot mortgages that are available on Aero Crew News in this column.

For more information visit, call 850-377-1114 or email

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Jonathan Kulak, Senior Loan Originator at Trident Home Loans which is a pilot/veteran-owned and operated mortgage lender licensed in 47 states and located in Pensacola, Fla. Jonathan holds an FAA Airline Transport Pilot certificate and is a first officer with a major commercial airline. His eight years of lending experience allow him to seamlessly navigate the toughest problems for his clients that have resulted in closing over 1,600 total loans in his career. He has been recognized in the prestigious Scotsman Guide since 2020 as one of the top-ten Veteran Loan Originators in the country. Jonathan is also a Lt. Col. in the Air Force Reserves, a distinguished graduate of both Texas A&M University and Air Force Pilot Training, and a former AC-130 Evaluator Pilot. He has deployed into combat zones ten times and is a veteran of operations Iraqi Freedom, New Dawn, Enduring Freedom, Resolute Support, and Inherent Resolve. Most importantly, he is a devoted husband to his wife Lauren of 19 years and the proud father of their four great children Vivian, Evelyn, Ruth and Jonathan.


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