Just how many corners do you have to cut and how much personal sacrifice do you have to make to sustain yourself in your new home?
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A “Homeownership on the Edge” consumer survey by Truework offers some unnerving findings after polling 1,000 Americans on their home purchase in the past 24 months.
Half the buyers say their mortgage would not be sustainable without refinancing, with many already delaying children, cutting essential living expenses and preparing to take on second jobs to stay in their homes.
“For decades, the conversation around affordability has focused on whether buyers could qualify for a mortgage,” said Randy Lightbody, head of mortgage at Truework. “However, our research shows that many buyers are qualifying based on one payment while planning their financial future around another, even gambling on a rate cut that might never come. Affordability is no longer just about getting into a home. It’s about staying there, and many of today’s buyers are making life-changing decisions based on a bet that may not pay off.”
Keep in mind the survey was nationwide and included first-time and repeat buyers. So, it’s not just those of us in high-cost California who are struggling. And it’s not just first-time buyers struggling. It’s all kinds of folks.
An obvious alternative for any of these buyers counting on refinancing into a lower mortgage rate and payment might be to just purchase a less expensive home with lower mortgage payments and lower property taxes. While that may be sage advice, it may also mean making an offer on a cheaper property that doesn’t meet the buyers’ most basic needs.
Only 1 in 5 recent buyers feel financially secure without a rate cut, according to the survey.
A common pitch from real estate agents and mortgage loan originators is to “marry the home and date the mortgage interest rate.” My advice? Proceed with caution.
Even if mortgage rates come down enough to make sense of a refinance, you and your property still must qualify in most cases (FHA and VA are the exceptions). If you wreck your credit because you are overwhelmed with bills, you make less income or your property value drops, you might not be able to refinance.
The findings reveal a striking paradox: Many recent buyers are cutting spending, delaying financial goals and rethinking parts of their purchase, yet very few say they regret becoming homeowners. For many Americans, owning a home remains important enough to justify financial sacrifices that might have seemed unreasonable just a few years ago.
Here are some survey highlights:
—88% of recent buyers with a mortgage say one common financial setback could jeopardize their ability to make their monthly payment
—85% of recent homebuyers with a mortgage say refinancing within the next three years is important to their financial health, up from 56% in a similar 2025 survey
—67% say a job loss or a reduction in income would put their mortgage payments at serious risk
—46% may need to cut spending significantly if they can’t refinance within three years
—44% of buyers said unexpected medical expenses could jeopardize their mortgage payments
—42% of recent buyers said a major home repair could put their house payments at risk
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—40% say they will need to get a second job if they are not able to refinance their mortgage in three years, and 21% would dip into retirement savings in the same scenario
—32% have already cut back on basic living expenses like food, clothing, health and hygiene to cover their mortgage today
—25% would need to get a higher paying job if they can’t refinance in the next three years
—20% are cutting back on retirement savings contributions
—14% have considered delaying retirement among those who have already cut spending
—13% have considered delaying having children among those who have already cut spending
The mortgage world makes credit decisions on borrowers based on a snapshot in time, not over an extended period. Oftentimes, a lot of qualifying creativity comes into play — such as co-signers and gift funds to boost chances of approval. So, it’s not just the borrowers on their own. In my experience over the last few years, only about half of all my clients were able to qualify completely on their own.
And we are pushing the envelope when it comes to income and debt ratios. In many cases, if the total of your monthly house payment and your other bills is less than 50% of your gross income, you qualify (co-signer or not). After all your payroll taxes, you may not have a lot left over for gas, groceries, clothing and other essentials.
My best suggestion is to do what you can to stay within your means when putting together a purchase budget — without having to count on a refinance. Keep several months of house payments in cash reserves, if possible.
In case of emergency, have a backup plan, like tapping money from your retirement account or a relative. Nobody wants to become a slave to their house payments.
Freddie Mac rate news
The 30-year fixed rate averaged 6.66%, 8 basis points higher than last week. The 15-year fixed rate averaged 6.04%, 8 basis points higher than last week.
The Mortgage Bankers Association reported a 6.4% mortgage application decrease compared with one week ago.
Bottom line: Assuming a borrower gets an average 30-year fixed rate on a conforming $832,750 loan, last year’s payment was $34 more than this week’s payment of $5,351.
What I see: Locally, well-qualified borrowers can get the following fixed-rate mortgages with one point: A 30-year FHA at 5.99 %, a 15-year conventional at 5.75%, a 30-year conventional at 6.5%, a 15-year conventional high balance at 5.99% ($832,751 to $1,249,125 in LA and OC and $832,751 to $1,104,000 in San Diego), a 30-year high balance conventional at 6.625% and a jumbo 30-year-fixed at 6.375%.
Eye-catcher loan program of the week: A 30-year mortgage, 30% down, 5.5% for the first five years payments, and 1 point cost.
Jeff Lazerson, president of Mortgage Grader, can be reached at 949-322-8640 or [email protected].
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