With 30-year mortgage rates still hovering in the mid-6% range this summer, we hear the same question from nearly every buyer we work with: “How do we make this actually affordable?” The good news is that affordability isn’t just about the sticker price or the rate on the day you sign — it’s about the strategy you use to get in the door and keep your monthly payment manageable once you’re there. Here are the approaches we most often walk North Metro and St. Croix Valley buyers through, and where each one makes the most sense.
House Hacking: Let Your Home Help Pay the Mortgage
House hacking means buying a property that generates income to offset your mortgage — a duplex or triplex where you live in one unit and rent the others, or a single-family home with a finished basement, accessory dwelling unit, or extra bedrooms you rent out. Because you’re occupying the property, you can often qualify for owner-occupant financing with a lower down payment than an investment purchase would require, while the rental income helps qualify for the loan and covers a real chunk of the monthly payment. Multi-unit properties come up regularly in the Twin Cities metro, and we’re happy to help you evaluate cash flow on any listing before you make an offer.
Buying Down the Rate
A rate buydown lets you (or the seller) pay upfront points at closing in exchange for a lower interest rate, either for the life of the loan (a permanent buydown) or for the first one to three years (a temporary buydown, like a 2-1 buydown). In a market where rates are still elevated compared to a few years ago, buydowns can meaningfully lower your monthly payment and improve your qualifying debt-to-income ratio. In many of our transactions, we’re able to negotiate seller concessions specifically earmarked for a buydown — effectively asking the seller to help cover your long-term cost of ownership rather than just cutting the price. Run the numbers with your lender on breakeven timelines, since buydowns pay off best when you plan to stay in the home for several years.
Assuming an Existing Mortgage
Assumable mortgages have become one of the more interesting affordability tools in this rate environment. FHA, VA, and USDA loans are generally assumable, which means a qualified buyer can take over the seller’s existing loan balance, interest rate, and remaining term instead of originating a brand-new mortgage. If a seller locked in a rate well below today’s market, assuming that loan can save a buyer hundreds of dollars a month. The tradeoff is that you’ll need to cover the gap between the loan balance and the purchase price — typically with cash or a second loan — and the process takes longer than a conventional purchase, often 45 to 120 days for lender approval. It’s not the right fit for every buyer, but when we find a listing with an assumable loan at a strong rate, it’s worth a serious look.
Looking at Lower Cost-of-Living Communities
Not every buyer needs to be in the heart of the metro. Communities across the St. Croix Valley — places like Somerset, Osceola, New Richmond, and River Falls on the Wisconsin side, or Marine on St. Croix and parts of Washington County on the Minnesota side — often deliver more home and land for the dollar, along with meaningfully lower property taxes on the Wisconsin side of the river. For buyers with flexibility on commute or remote work arrangements, widening the search beyond the core metro can be one of the single biggest affordability levers available. We can help you compare true cost of ownership — taxes, insurance, and commute costs included — across communities on both sides of the river.
Buying a Fixer-Upper and Renovating Strategically
Homes that need cosmetic or moderate updates typically sell below market value, and renovation loan products like the FHA 203(k) or Fannie Mae HomeStyle loan let buyers roll renovation costs into a single mortgage rather than paying cash out of pocket after closing. The key is being strategic: prioritize updates that build equity and improve livability — kitchens, bathrooms, and mechanical systems — over purely cosmetic changes, and get a realistic contractor estimate before you write an offer. A well-chosen fixer-upper in a strong St. Croix Valley or North Metro neighborhood can deliver more long-term value than a move-in-ready home priced at a premium.
Buying with a Roommate or Co-Buyer
Co-buying — purchasing a home with a friend, sibling, or partner who isn’t a spouse — has become an increasingly common way to make homeownership pencil out, especially for first-time buyers. Splitting the down payment and monthly payment across two incomes can open up a higher price range or simply make the monthly number far more comfortable. If you’re considering this route, we strongly recommend a written co-ownership agreement covering how expenses, equity, and a future sale or buyout would be handled — your lender and a real estate attorney can help structure this properly alongside the purchase.
Let’s Find the Right Strategy for You
Affordability isn’t one-size-fits-all, and the right combination of these strategies depends on your income, timeline, and goals. Whether that means house hacking a duplex in Stillwater, negotiating a rate buydown, or widening your search into the St. Croix Valley, the Carchedi Group is here to help you build a plan that actually works for your budget. Reach out to us today and let’s talk through your options.