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Buy Now, Pay Later Will Be The Death of Real Estate

Buy Now, Pay Later Will Be The Death of Real Estate

Buy Now, Pay Later accounts are becoming silent deal-killers for buyers. Fed rate cuts? Don’t be fooled—history shows mortgage rates often tick higher right after, making “waiting” a costly mistake. And with a Fed Governor under fire for mortgage fraud, the reminder is clear: honesty isn’t optional—it’s the only way to keep deals alive.

Kreg King
September 01, 2025

🍂 Fall is here—and no, I’m not talking about pumpkin spice or cooler weather! I’m talking about falling rates making their way back into the spotlight! Let's go! The mortgage world has been buzzing with hot topics and plenty of drama as of late! Let’s dive in and break it all down!

We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers stay informed. Be sure to follow us!

Read time: ~5 minutes

Rates ended FLAT compared to last week, and volatility was LOW. Rates remain in the mid to high 6% range for most loan types without paying discount points. Paying discount points can get you in the low/mid 6's.

Buy Now, Pay Later Will Be The Death of Real Estate

If you want a real-time read on the economy, don’t turn to CNBC, Bloomberg, Dave Ramsey, or even your local news. The clearest picture comes from Loan Officers working with a high volume of clients.

And right now, the biggest threat Nick and I are seeing to everyday buyers is Buy Now, Pay Later (BNPL).

We’ve covered this topic before in newsletters and videos, and while it may feel like we are beating a dead horse, it’s shocking how little attention this issue is currently getting.

Just last week, we had a client under contract who provided a bank statement for closing. It showed 27 separate BNPL transactions—Klarna, Zip, Affirm, AfterPay. One of them? Financing a Pizza Hut order at 35.97% APR 🤯

Here’s the problem: the moment an Underwriter sees a BNPL transaction, they require full documentation for that account. In this case, we spent hours tracking down statements and payoff letters. When the dust settled, the client only closed because his grandmother threw him a last-minute Hail Mary and gave him a gift.

He got lucky. Most won’t.

If you’re working with buyers, you need to ask upfront whether they use BNPL. If the answer is yes, tell them to stop immediately. Because if those transactions show up on a bank statement during underwriting, it could blow up the deal.

Key Takeaway: Buy Now, Pay Later (BNPL) accounts are becoming a major deal-killer. Even small purchases financed through BNPL can trigger underwriting issues and delay closings. We all need to warn clients early—stop using BNPL immediately if homeownership is the goal!

Fed Rate Cuts = Spike in Buyer Activity!

As stated above, Nick and I talk with a large number of buyers on a weekly basis. One trend we noticed: the moment there's buzz about lower rates; the buyer activity heats up tremendously!

It makes sense—there’s a large group of buyers still sitting on the fence, waiting for either rates or home prices to drop.

Lately, we’ve been hearing comments like, “We heard the Fed is going to cut rates soon.” As mortgage nerds, we love these conversations!

Buy here's the key point to drive home: A Fed rate cut in September does NOT mean mortgage rates will drop as well.

Remember, the market reacts ahead of time. That September cut? It’s already priced in, which is why rates have drifted lower since Powell’s Jackson Hole speech. When the actual cut is announced, history tells us rates could actually tick higher. In fact, mortgage rates rose after all three Fed cuts last year!

Again, we’re not trying to dampen buyers’ optimism, but it’s important to set the right expectation: waiting for a Fed cut won’t guarantee lower mortgage rates! The smarter move is to act now while others are waiting on the sidelines.

Key Takeaway: A Fed rate cut doesn’t automatically mean mortgage rates will drop—those changes are usually priced into the market beforehand. In fact, rates have historically ticked higher immediately after Fed cuts, as we saw with all three last year. Buyers waiting for September rate cut may miss the window; acting before the rate cut would be the smarter move!

Fed Governor Accused of Mortgage Fraud – Why It Matters to 🫵

So much drama with the Fed lately!

At the end of August, Fed Governor Lisa Cook was accused of mortgage fraud. The claim? She listed two different homes as her “primary residence” to snag better loan terms. The courts will sort it out, but it’s a big reminder for all of us: mortgage fraud is no joke!

We all know mortgage fraud isn’t just about faking documents. It can be as “simple” as saying an investment property is your primary home, stretching income, or hiding debts. Even little misrepresentations can blow up a loan. And when it happens, the fallout is ugly: denied loans, fines, possible legal trouble, and sometimes even jail time.

For us in real estate, the ripple effects are real:

Closings get delayed or killed when fraud is uncovered.
Reputations take a hit—not just the borrower, but everyone tied to the deal. Losing your license over one deal is NOT worth it!
Lenders tighten the rules when high-profile cases like this hit the news.

With AI tools increasingly able to detect fraud, these issues will only become more visible. The bottom line: always stress honesty to your clients. It protects them, protects us, and keeps deals moving. And if you ever suspect fraud, don’t ignore it—speak up! Your career and your clients’ future are at stake.

Rebel 2026 - Speaker Reveal & Tickets Go On Sale 10/21

350 seats disappeared in 70 minutes, and those who waited missed out. That’s what happened at last year’s speaker reveal and we don’t want that happening to you this year.

What is Rebel?

Rebel is a one-day event where professional misfits, marketers, and entrepreneurs come together to burn the old playbook and build something better. Raw. Loud. Unlike anything this industry has seen.

Mark Your Calendars 📅 The big event will be on Thursday February 5th, 2026

But first…