home buyers get creative with cash deals to fend off high mortgage rates

Home Buyers Get Creative With Cash Deals to Fend Off High Mortgage Rates


Ron Brown, a partner with Heidrick & Struggles, was on the hunt in Colorado’s Arapahoe County for a new primary residence that required less upkeep than the one he was living in. By the time he found a 3,000-square-foot townhouse he wanted to buy in September, mortgage rates were significantly higher than they were a year ago. On Sept. 15, Freddie Mac announced that the average rate that week on a 30-year fixed-rate mortgage topped 6% for the first time since 2008.

To avoid the rising rates, Mr. Brown, 56, said he bought the three-bedroom home in Littleton, Colo., for $965,000 in cash. To access the capital he needed for the purchase, he tapped into his personal savings and took out a loan using his stockholdings as collateral, receiving an adjustable rate based on the federal-funds rate plus a 2.25% margin. On Nov. 7, the federal-funds rate target was 3.75% to 4%.