Tag Archives: home-buying

Don’t Let Interest Rates Make the Decision for You

15 Jul

By Doug Witten,

REALTOR at REALTY WORLD Knox Realty Group- KY

If you’ve spent any time watching the news lately, you’ve probably heard plenty about interest
rates. Every time they move up or down, headlines make it sound like the entire housing market
is about to change overnight. It’s easy to understand why many people are asking the same
question: “Should I wait to buy until rates come down?”

The honest answer is: maybe—but maybe not.

One of the biggest financial mistakes I see people make is allowing interest rates alone to
determine whether they buy a home. While rates certainly matter, they should never be the only
factor driving one of the biggest financial decisions of your life.

Instead, start by asking yourself a different question: Am I financially and personally ready to
own a home?

If the answer is yes, then interest rates become just one piece of a much larger puzzle.

Here’s why.

A mortgage interest rate affects your monthly payment, but so do the home’s purchase price,
property taxes, insurance, your down payment, and the length of the loan. Focusing only on the
interest rate can cause you to overlook opportunities that make good financial sense overall.
I’ve seen buyers delay purchasing for a year or two while waiting for rates to drop, only to find
that home prices increased enough to offset any savings they hoped to gain from a lower rate.
None of us has a crystal ball. Trying to perfectly time the market is a difficult strategy, whether

You’re investing in stocks or buying a home.

Life doesn’t always wait for ideal market conditions.
People get married. Families grow. Children start school. Military orders arrive. New jobs create
opportunities. Retirement approaches. Those life events often matter far more than whether
mortgage rates are half a percent higher or lower.

Another important point people sometimes overlook is that mortgage rates aren’t permanent.
If rates decline in the future, homeowners often have the opportunity to refinance into a lower
rate, provided it makes financial sense and they qualify. You can’t usually go back and purchase
the same home at yesterday’s price, but you may have options to adjust your financing later.
That doesn’t mean everyone should buy right now.

If purchasing a home would leave you living paycheck to paycheck or force you to drain every
dollar of your savings, waiting may be the wiser decision. Homeownership should provide
stability and opportunity—not unnecessary financial stress.

Buying because you’re afraid of missing out isn’t a sound financial plan. Neither is waiting
indefinitely because you’re hoping for perfect market conditions.

The best financial decisions are usually made with a long-term perspective.
A home isn’t just another monthly bill. For many families, it’s their largest investment, a place to
build equity over time, and the setting where life’s biggest moments happen. When viewed over
ten, fifteen, or twenty years, today’s interest rate often becomes a much smaller part of the
overall story.

As someone who works with buyers and sellers throughout Central Kentucky, I’ve found that the
families who are happiest with their decision aren’t the ones who bought at the absolute lowest
interest rate. They’re the ones who bought when they were financially prepared, chose a home
they could comfortably afford, and kept their focus on their long-term goals instead of short-term ones
headlines.

Interest rates deserve your attention—but they don’t deserve all of it.
The next time you hear another headline about mortgage rates, take a deep breath. Look at
your own finances, your family’s needs, and your future plans before making a decision.
Because in the end, the best time to buy a home isn’t when the market is perfect. It’s when the
decision is right for you.

Tags: , , , ,

More Than $125 Billion: The Hidden Savings Account Most Homeowners Never Think About 

5 Jul

At this very moment, an estimated $125 billion (about $380 per person in the US) or more of homeowners’ money is sitting in mortgage escrow accounts across America. 

Let that sink in for a moment. 

That is not money belonging to banks. It is not money belonging to insurance companies. It belongs to homeowners who have been required to deposit funds each month to pay future property taxes and homeowners’ insurance premiums. 

For many Americans, these escrow accounts represent one of the largest pools of personal savings they possess—yet few homeowners ever think about them. 

A mortgage lender establishes an escrow account to collect money for property taxes and insurance. Instead of receiving separate tax and insurance bills throughout the year, homeowners pay one monthly mortgage payment that includes principal, interest, taxes, and insurance. The lender then pays those bills when they become due. 

For millions of families, this system provides convenience and peace of mind. It reduces the risk of missed tax payments, insurance cancellations, and unexpected financial surprises. 

But there is another side to the story. 

Because taxes and insurance are collected months before they are due, lenders may hold a homeowner’s thousands of dollars at any time. Federal regulations permit lenders to maintain reserve cushions in these accounts to ensure future obligations can be paid. 

Multiply those balances by the tens of millions of mortgage loans in America, and the result is staggering. Industry estimates suggest that more than $125 billion (about $380 per person in the US) may be sitting in residential escrow accounts nationwide. 

The question homeowners should ask is simple: 

What happens to all that money while it sits there? 

In many cases, the answer is not much. 

While some states require lenders to pay interest on escrow balances, many borrowers receive little or no return on funds that may remain in escrow for years. If $125 billion (about $380 per person in the US) earned just four percent annually, it would generate approximately $5 billion (about $15 per person in the US) in interest each year. 

Recently, our office assisted a homeowner in the Lexington area who wished to assume responsibility for paying his own property taxes and homeowner’s insurance. After reviewing the situation, it became apparent that $7,000 had accumulated in the escrow account. Based upon the timing of the tax bills, insurance premiums, and the lender reserve requirements, the actual amount needed to comfortably satisfy future obligations appeared to be much closer to $4,000. 

To be clear, there was nothing improper about the lender’s actions. Escrow balances often fluctuate throughout the year due to payment schedules, annual escrow analyses, tax increases, insurance adjustments, and reserve requirements. Nevertheless, the homeowner was surprised to discover how much of his money was sitting in the account. 

Closing an escrow account is not a one-step process. The borrower must typically meet lender requirements, demonstrate sufficient equity, maintain a satisfactory payment history, and formally request an escrow waiver. Depending upon the lender and loan program, additional reviews and documentation may also be required. 

In this case, the homeowner closed the escrow account and received the accumulated funds. Going forward, he will be responsible for managing and paying his own property taxes and insurance premiums directly. 

Managing taxes and insurance independently is not for everyone. It requires discipline, planning, and the ability to set aside money throughout the year. Miss a tax payment or allow insurance coverage to lapse, and the consequences can be severe. 

For many homeowners, escrow remains an excellent tool. It simplifies budgeting and helps ensure important bills are paid on time. For others—particularly those with substantial equity, strong financial habits, and a desire for greater control over their money—an escrow waiver may be worth exploring. 

The next time you review your mortgage statement, look at the escrow section. You may discover that one of your largest financial assets is an account you have never considered. 

In an era when Americans are searching for every available dollar to combat inflation, rising insurance premiums, and increasing property taxes, it may be worth asking a simple question: 

How much of your money is sitting in an escrow, and is it working as hard as you are? 

By T.W. Shortt 
Focus on Finance – July 2026 

Tags: , , , ,