We just refinanced. And no, it wasn’t a 10 point drop in interest rates, either. The secret to our savings is reducing the term of the mortgage. We went from a 15 year mortgage to a ten year mortgage. Our original mortgage would have cost us more than $46,000 is interest over the 15 year term. Our new mortgage will cost us less than $17,000. And the most amazing part of it is our payment will only go up about $150.
When I work with buyers, I am always amazed that they will fight till the bitter end and sometimes walk away from a purchase in which we are maybe two or three thousand dollars apart in price. But then they will get a 30 year mortgage with minimum down payment and end up paying the bank almost as much in interest as they pay the seller for the house.
I don’t dislike banks. If the only house I could buy was one I could afford to pay cash for, well, I would not be a happy camper. And if I could only sell real estate to individuals that can afford to pay cash, I doubt I would sell very many houses. Banks are good and mortgages are great but we should only finance what is necessary. After all, I’d much rather see that $20,000 go towards my vacation than the vacation of some banker!
By the way, interest rates are extremely low, making it a very attractive time to either buy real estate or refinance. Don’t hesitate to give me a call for more information. My office number is 756-7457.
1 comment:
Seriously, rates can ONLY go up from here - and not just for Rochester - but for the entire nation as inflation is quietly coming up and the fed will have no choice but to raise rates as much as they don't want to right now.
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