This picture is a great visual of the amazing opportunities that buyers have nationwide right now. I was only 4 years old when interest rates hit that all time high of 18.45%, but I can’t even imagine. I know from the 5 years or so that I brokered mortgage loans through the 2000’s that even the 8.1% of the 1990’s sounds ridiculously high. And this picture doesn’t even show you a snapshot of what’s happening in 2012 with rates down in the 3’s and some lucky mortgage borrowers securing them self interest rates in the high 2’s for a 15-year fixed mortgage. I can remember years ago when I locked in a 30-year fixed interest rate of 5.5% on my own primary residence and thinking on how great that was. Now that is an overpriced interest rate!
Here are some other great graphs and charts that my friend JP from North American Title sent me:
And what many buyers fail to realize is the substantial amount of saving even a half of a percent can equate to on even the smallest loan size when you look at how that affect things over the course of a 30-year payment history. So many buyers get too focused on the sales price, and not enough on the interest rates. If you are paying all cash, well then of course it’s all about the price! But if you are securing a mortgage on your big purchase, every eighth of a percent you can reduce that interest rate equates to huge cost savings for you and your family as the years of amortization pass you by. Be sure to ask you mortgage broker about how slightly dropping your interest rate can save you money over the life of the loan and how that compares to the insignificant cost in obtaining that lower rate. You’d be surprised how just a few thousand dollars of upfront expense in buying down an interest rate can lead to tens of thousands of dollars of savings over the course of the loan. Any decent mortgage broker should be able to quickly calculate those scenarios with time-frames on where your breakeven timeframe is within the loan.
Call me for more detail about any of this and/or a referral of a trusted mortgage broker who can assist you in discovering what mortgage program and interest rate is best for you!!!
Posted by Eric Leach of Resort Property Realty, Inc.