Mortgage rates are above 7.5%.
Unlike most folks, I believe they will be in this range for longer than you think.
This is what this means to you.
Today, the median home price in America is around $400,000. With mortgage rates above 7.5%, that’s about $2,650 in monthly mortgage and interest payment. Two years ago, when mortgage rates were 2.9%, your total paymenet was about $1,500. The difference is about $1,100, or 68% more expensive today than it was two years ago.
I gets worse.
To understand the how this plays out for a 30-yr loan, we need to fully allocate the amortized amount. Over the 30 year period of that 2.9% loan, your total interest paid would be about $190,000. Today at 7.5%, that total interest over 30 years is around $586,000… or about $380,000 more.
Mortgage Rates Deliver PAIN
Most homebuyers look at the monthly amount to ensure they can afford it based on their income and credit. Although that’s fine, it’s also short-sighted.
By stepping back and looking at the entire loan amount you’ll pay you may gasp and decide it’s not a good deal to pay $380k more over the life of the loan.
But, you don’t need to resign to mortgages rates being offered today. You can negotiate with the seller to help you buy-down the mortgage rates.
For example, a homebuyer can ask the seller to pay for a 3-2-1 buy-down. That means you’d get the current rate minus 3% in the first year… current rate minus 2% in second year and 7.5% minus 1% in the third year.
There’s no guarantee a seller will do this, but if your offer is strong enough, this is a great way to utilize all options available to you in today high mortgage rates environment.
But if that doesn’t work, this may be a moment when now is not a good time for you to buy. If that’s the case, be patient.
Prices or mortgages rates may retreat in the next year or two.
If that happens, and you sit this market out on the sidelines… mortgage rates may settle back to a range you can afford the monthly amount, and save tens of thousands of dollars over the next 30 years.
The REAL Reason Why 7.5% Rates Hurt It’s not only about your monthly payment. Or about your fully loaded debt service. It’s about how much interest you’ll pay over the 30-year loan. Get my Free Weekly eLetter https://mrdowntowndelray.com/weekly-eletter-2/ WELCOME TO MY CHANNEL! If you’re new, please subscribe: 👇👇👇👇👇👇👇👇👇👇 ✅ https://bit.ly/33u34fZ Ready to start the conversation about moving to Delray Beach Florida? Call/Text me at 561-777-4089. We can do a zoom call if you prefer. I have folks contacting me weekly about living in the Delray Beach Florida area. So if you’re thinking of moving or relocating to Delray Beach or South Florida, I can help you. Grab my FREE Delray Beach (and surrounding areas) Relocation Guide – https://mrdowntowndelray.com/relocation-guide-delray-beach/ 🙋♂️Let’s be social: * Instagram: https://www.instagram.com/johnmwieland/?hl=en * Facebook: https://www.facebook.com/RealtorProJo… * Twitter: https://twitter.com/JohnMWieland * LinkedIn: https://www.linkedin.com/in/john-m-wi… 🧑💻 Home Search: https://mrdowntowndelray.com/ Realtors – Partner with me at EXP Realty! Schedule a call to learn how. Florida license SL3444240. (Oh yeah, I lived in Costa Rica for over 12 years. Owned & operated 13 real estate franchise offices. If you’ve ever thought about buying a home in Costa Rica, call me. I can help you get from here to there safely and guide you through the entire process. My Costa Rica Rolodex is full of friends, lawyers, tour operator to help ). #delraybeachrealtor #mrdowntowndelray #johnwieland
