Interest rates cannot be talked about too much right now. When have mortgage interest rates ever been at 4% or less? How about, never! Such low interest rates means saving hundreds of dollars on your monthly mortgage payment when purchasing or refinancing a home, compared to any other time in the history of mortgage loans. If you are considering purchasing a home or even refinancing, NOW IS THE TIME!!
Starting in 2008, rates started to come down from an already, historically low rate of 5.5% or so and then we started to gasp, and gasp and gasp as rates plunged lower and lower and lower.
In 2009 I was sitting in a closing with clients and was blown away to see their locked in mortgage rate of 4.75%. A year later, a different set of clients who were buying a home locked in at 4.2%. A month later they are now at 4.1%. A 15 year mortgage can be locked in at 3.5%!!
What does does this mean for your monthly payment?
Here is an example of your monthly payment on a median priced, Northern Utah home with a historical rate, vs. the current rate:
-Median Priced home (Wasatch Front): ~$200,000
-Loan Amount after 5% down: $190,000
-Historical Mortgage Interest Rate: ~8%
Monthly Payment: ~1,400
vs.
-Current Mortgage Rate 11/08/2011: ~4%
Monthly Payment: ~$900
Savings: $500!!!
History is an indicator of what to expect in any scenario. Using this historical indicator you can expect that mortgage rates will swing back up toward the 8% range, eventually. When that happens, you can expect a payment on a $190,000 mortgage to go up $500.00 per month. Of course, the savings are greater as the loan amount increases.
I'll put this opportunity into perspective: Let's say you borrowed the $190,000 to purchase the median priced home and locked in your 30 year loan interest rate at 4%. As an opportunist of the market, you make your minimum $900 mortgage payment and go the extra mile by pretending you are paying the historically average loan interest rate of 8%. This means you apply an extra $500.00 toward the principle balance of your loan. In this scenario, you would pay off the thirty year loan on your home home in fifteen years!! So, just by paying what a historically average borrower would have paid on a $190,000 mortgage, you will pay off your mortgage twice as fast as they would have!
Opportunity knocks. Take advantage of this incredible market. I'm ready to help as your agent.
