Here is a blurb from what I sent a potential client last night. I have quite a few fence sitters right now and maybe this helps get them motivated.
If you purchase for $500,000.00 and put 3.5% down ($17,500.00) you would have the following payments – Principal and Interest $2204.56 / Insurance $80.00 / Property Taxes $520.83 / PMI $341.77 = $3147.16 – Breaking this payment down you would pay off $9421 the first year or $785.15 per month which I would call long term tax free savings! Property values have increased by over 5.7% annually over the past 30 years so if your property goes up by just 3% annually then the property would go up by $15,000.00 the first year or $1250.00 per month. So if you look at the $3147.16 – $785.15 long term savings and $1250.00 = $1112.01 as the true cost of owning a home! Yes, the numbers are long term and the first $500,000.00 that comes out of the house above your purchase price is tax free! YAY!
By the way, if rates go up by 1% (where they were last October) then your payment on the $550,000.00 price would be $317.09 higher every month! One more way to look at it is that if interest rates go up by 1% then the $550,000.00 property would have to sell for $504,000.00 so you would have the same payment!
I think that is pretty simple and interest rates being where they are right now vs. where they could be in a few months should help motivate people. Leases can be broken, you can move before the baby is born, and kids can move during the school year!
Interest rates are hanging in there today and most are exactly where they were on Tuesday! Rates could go either way at any time. Here are rates as of this moment:
- 30-year fixed conventional 1st Mortgage with 25% down – 3.750% (3.806 APR). Loan amounts up to $484,350.00 = $2243.10
- 15-year fixed conventional 1st Mortgage with 25% – 3.250% (3.350 APR). Loan amounts up to $484,350.00 = $3403.38
- 5/1 ARM 1st Mortgage – 25% down – Fixed for 5 years and then becomes variable – 3.250% – (3.2605 APR) Loan amounts up to $3,000,000.00 = $13,056.19
- 7/1 ARM 1st Mortgage – 25% Fixed for 7 years and then becomes variable – 3.375% – (3.385 APR) Loan amounts up to $3,000,000.00 = $13,262.89
- 10/1 ARM 1st Mortgage – 25% Fixed for 10 years and then becomes variable – 3.500% – (3.510 APR) Loan amounts up to $3,000.,000.00 = $13,471.34
- 30-year fixed 1st Mortgage FHA loan 3.50% down – 3.375% (4.784 APR). Loan amounts up to $484,350.00 = $2178.77 + $349.08 PMI = $2527.85
- 30-year fixed 1st Mortgage VA loan 0% – 3.500% (3.681 APR). Loan amounts up to $484,350.00 = $2174.95
- 30 Year Fixed rate 1st Mortgage Jumbo Loan 25% down – 4.125% (4.159 APR). loan amounts up to $3,000,000.00 =14,539.49
All of the above are based on a 740 credit score with 25% down on conventional and Jumbo Loans. Rates are subject to change without notice, your mileage may vary!
I will be in the office all week so please let me know if you have any questions. My cell number is 661-714-6258 and my office line is 661-260-2970 xt. 2222. My team is awesome so if I am unavailable you can always ask for Dwayne, Kris, Whitney, Anna, David, Irma or Amy! I work weekends and we love to help! Have a great week!