How to Save Nearly $100,000 on Purchasing a Home

Filed under: Market Comentary

Did the headline catch your attention? There is a simple solution if you are looking for a way to save $100,000 when buying a house: buy now, instead of a year ago when rates were 1% higher!

Interest Rates: 2020 Compared to 2019

I ran some numbers earlier today and pulled the historical mortgage rates. If you go back a year, interest rates at the time were literally a full percentage point higher compared to our current rates.

Compare it today: amortize it over 30 years and it is a $98,000 savings over the course of the loan (assuming a $500,000 mortgage). Of course, the numbers vary depending on the cost of your home, how much equity you are rolling in, and the type of loan you can get based on your personal situation.

It’s amazing what it does when we have a drop of 1% in the interest rate.

Don’t Overlook Interest Rates

So many people overlook how much interest rates play a role in their mortgage payment. It’s easy to be worried about paying an extra $2,000 or $5,000 on a house. I hear a lot of people wondering if home prices are too high to buy right now.

These factors are valid, but don’t overlook what might be the most important thing. You need to consider your long-term strategy – which should be to buy a property right now, then ride it out. Saving a few hundred dollars a month over 30 years adds up to a lot of money over time!

Reach Out for Personal Recommendations

Don’t miss this opportunity! If you are thinking about buying a home, then I’d love to talk to you about how the numbers add up. Reach out any time so we can find the right mortgage solution for your needs.

If you are a real estate agent, make sure you are helping your clients understand the importance of how much these low interest rates can affect their purchase. Share the good news: mortgage rates have improved by more than 1% compared to the summer last year.

Contact me any time if you’d like to discuss mortgage options. I’m always here to help.

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