Every renter needs to watch this video right now! If you don’t own a home, You need to watch this video. Most millionaires have become wealthy through purchasing real estate & these low mortgage rates make this the perfect time to buy, rather you’re looking to buy a home to live in, or purchase an investment property. These LOW Mortgage rates mean it’s time to buy a home RIGHT NOW! I’ll show you how these insanely low mortgage rates change your monthly payment, how they affect your buying power, & how much money they’ll save you over the life of your loan.
What’s a mortgage rate? Your mortgage rate is the amount of interest charged by the company you took out a loan with to buy your home. Last year, rates were sitting at 5%. Because we’ve been spoiled by rates in the 4% range, this seems high, but really, it’s a great rate especially for people who were paying 18% in the 1980’s.
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Before I talk about mortgage rates, I want to take a moment to tell you how important owning a home is. For a large portion of Americans, homeownership is their primary source of net worth, & it’s an important part of accumulating wealth.
To get a better understanding of how important home ownership is, watch my video Top 10 Reasons you need to buy a home. Here’s the link… https://youtu.be/T9MCXXtFaIc
What are the benefits of lower mortgage rates? The obvious answer is you’ll have a lower monthly payment when you buy a home. But, what are the other options?
1. You can buy a BIGGER house
2. You can buy a NEWER house, maybe build a home.
3. You can afford to purchase a home in a more expensive area, moving closer to the city, work, & etc.
4. You can more easily sell your current house & move up to something nicer, because buyers flood the market when rates drop which means you’ll be able sell your home quickly.
5. Renting may be more expensive than a mortgage payment. If so, you have a great opportunity to buy a home & stop paying rent.
Or you can stay in your current home & refinance, which will make it easier to purchase investment properties.
A year ago, rates were 5%. Currently, rates are around 3.675%. What does that mean for you? The rate drop means you can buy a home for $50,000 more than you could’ve a year ago. Even with the recent appreciation in homes, this lower rate means it’s better to buy a home today than a year ago.
Let’s run a scenario & say you buy a home for $300,000. If you put 20% down, approx $60,000, your loan would be $240,000. If rates were still at 5%, your monthly payment, not including taxes & insurance since those #’s fluctuate from location to location, would be about $1,290/mo. To buy the same home today, your monthly payment would only be $1,100. This saves you nearly $200/mo. If your loan amount was $500,000 your payment would go from $2,685 to $2,295. That’s a savings of nearly $400/mo.
Going back to the scenario of buying a home for $300,000 comparing a rate of 5% to today’s rates, you’ll save $60-$70,000 over the 30-year term. That is HUGE, especially when it comes time to retire or buy a new home.
What if rates were at 18%, like they were in the 80’s. What would that do to your payment on a $300,000 home? At 18%, your monthly payment would be $3,600/mo. Seriously, how were people buying houses back then? Compare that to today’s rates where your payment would only be $1,100/mo. & you can see that your payment would be more than 3x higher. Sure, home prices have risen sharply in some areas, but how much of that gain do these lower rates wipe out? As I mentioned earlier, about $50,000! If you’ve been waiting for the market to crash because you’ve heard we might have another recession, you’re making a mistake. In 3 of the last 5 recessions home prices have actually increased. So, even with a recession, home prices will most likely continue to rise, at least in most parts of the country.
There’s just a few things you should know about mortgage rates before I end this video. Not everyone will qualify for the best rate. There’s a lot of factors. Here’s a quick list: your credit score, down payment, job stability, the location you’re buying a home, & the type of loan you choose.
If you’re ready to buy a home, watch my video, Everything you need to know before you buy a home, here’s the link… https://youtu.be/efFls0fdR_M
Ty Wilde is Utah’s best real estate agent on YouTube with dozens of videos on all things related to real estate. Ty the Real Estate Guy is Utah’s best real estate agent on YouTube for New home construction videos. But, Ty Wilde also has some of the Best Videos on buying a home, selling a home and Real Estate investing. Be sure to Subscribe to Ty’s channel for the best real estate videos on YouTube.