Hug your low rate (but don't let it run your life)

Good Sunday morning.

If you got your loan a few years back, you probably have a rate you'd fight a bear to keep. I don't blame you. I'd tell most people to hug that thing.

But I want to talk about the flip side, because I'm seeing it a lot.

There's a name for it: the golden handcuffs. People stay in a house that doesn't fit their life anymore because they don't want to give up the low rate. The kids moved out and the house echoes. Or the family grew and everybody's tripping over each other. Or the commute is eating two hours a day. Or the job they really want is three states away.

And they stay. Because of the rate.

I get it. Nobody wants to trade a great rate for a worse one. But here's the question I'd gently ask: is the rate serving your life, or is your life serving the rate?

A loan is a tool. It's supposed to help you live the life you want. When it starts making the decisions for you, something's upside down.

Now, sometimes the math says stay put, and staying is exactly right. There are ways to make a house work better without moving. A remodel. A roommate. A rental unit out back. A different way of handling your other debts. Sometimes staying really is the smartest decision you'll make all decade.

Here's what that can look like. A few weeks ago a past client wrote me out of the blue. About four and a half years ago, he and his wife sold their house, bought the next one, and came out of it with extra cash. The tempting move was to pour that cash into the new loan and shrink it. We talked it through, and they kept the loan as it was and invested the money instead.

Here's what he told me. They've grown that money, and they've used some of the growth for projects on the house, for retirement savings, and for charitable giving. Then he wrote a line I'll be thinking about for a while:

(He was kind enough to let me share it. I took his name off.)

That's what I mean by a loan serving the life.

Other times, people stay three years too long and pay for it in ways that never show up on a statement. Missed opportunities. Stress. The same argument in the same kitchen, over and over.

I can't tell you which one you are from here. Nobody can. But I can sit down with you and lay the real trade-offs side by side so you can see them clearly. Sometimes the answer is "keep hugging it." Sometimes it's "let's look at what moving would actually cost, and what it would actually buy you."

Either way, you get to make the decision. The rate doesn't.

Yours to count on,

Tom

Tom Griffith · Loan Strategist
541.915.1200 · [email protected]

P.S. Almost every Sunday somebody hits reply, and half the time we end up talking about life, not loans. Kids, parents, health, the whole works. That's my favorite part of doing this. You don't need a reason to write. Just say hi.