interest rates at all-time lows can you
actually afford that dream house that’s the topic of my next video how much
house can you afford well that’s a topic of today’s video if you haven’t heard I
don’t know where you’ve been but if you haven’t heard the mortgage rates are the
lowest they’ve been in a very very long time some mortgage brokers or bankers
are telling me it’s the lowest it’s been in recorded history I’m not a historian
so I don’t know if that’s factual but I’m hearing the hype all I can tell
they’re very low your buying power your house buying power has gone up
significantly whether you’re looking to buy first-time home buyer you’re looking
to move up or even if you’re looking just to refinance
it’s a great time to revisit your mortgage professional your realtor and
find out what’s going on with the numbers I’m gonna share with you a tool
that I found online so you can do a little research on your own and it’s a
basic mortgage calculator that I just went to Google I typed in how much house
can I afford Mortgage affordability calculator I’m going to include the link
below so you don’t have to shop around for it and you just type in your numbers
we’re gonna I’m gonna go through how to use it and I’m gonna share with you a
little story of a buyer that I had two years ago that purchased a house right
here on Long Island they loan a man on the house not the purchase price the
loan amount on the house was four hundred thousand dollars four hundred
thousand their interest rate was five percent
that means that their monthly payment for just the mortgage not counting
insurance and everything else but just the mortgage was two thousand one
hundred and forty seven dollars at a five percent interest rate for a
thirty-year fixed interest rates now we’re going to do a reduction about two
points because that’s the proximate reduction from two years ago that I
believe they’re at hovering somewhere in the threes so for argument’s they could
to make it easier for the math we’re gonna go to a three percent
drops down to 1686 dollars a month let’s do it again five percent to one four
seven three percent this is a lot of fun saving a lot of money in 1686 dollars so
what does that mean it means you get more money in your pocket you can buy
more of a house now I’m not a math person so I did the math on a calculator
before that’s a four hundred and sixty one dollar gain per month with a two
percent drop that’s five thousand five hundred and thirty-two dollars a year
I’ll say it again five thousand five hundred and thirty-two dollars a year in
your pocket for you to do whatever you want with that’s pretty powerful
so it means that if you want to refinance yes there are closing costs
involved but you can determine how long it will take to get the return on your
investment for these particular people the buyers I mentioned they just bought
their house two years ago so if they refinance they’re in it for the long
term they plan on staying there they’re definitely gonna get the return on their
investment in the long run now another tool that I want to share with you
before I do that if you are on the fence about buying a house you’re a little
nervous about it I’m gonna include a link on the bottom for a free e-book on
a home buyers guide everything you need to know about buying your home whether
it’s your first time of a move-up home free buyer’s guide click the link below
and you can take advantage of that free offer the other item I’m gonna share
with you is another calculator and I love these calculators and they’re free
and they’re online I’m gonna type in the same situation when you want to refi or
you want to buy a house you can sit down with the mortgage person and they say to
you do you want to buy a point well what does that mean if you want to buy a
point that means you pay more interest upfront in that front of the loan like
its front loaded one point is approximately 0.25 percent or a quarter
percent on the interest rate on a 30-year loan that could be a substantial
amount of money but is it worth it first if you have the money and it’s personal
choice should you do it well this calculator will help you decide now this
is put out nerd wallet as you can see here mortgage
calculators should I buy points we’re gonna use their scenario $400,000 thirty
year term three and a quarter percent interest rate is what we’re gonna say
the interest rate is now one point one point is one percent of the loan so that
would be four thousand dollars interest rate with points goes from three and a
quarter we’re going to use a quarter point drop three percent breakeven is
six point one years or seventy three months and four thousand dollars is the
points your monthly mortgage payment with points 1686 compared to one
thousand seven hundred and forty-one so this is a great calculator to decide or
help you decide if you want to buy the points I’m also going to include a link
down below for this mortgage calculator so now that you see how much house you
can’t afford it’s only you that can make that decision some people just have
analysis paralysis where they just keep you know going on and on and on and I
can tell you I was one of them many years ago I finally made the plunge and
it was one of the best decisions I’ve ever made was to buy a house and yes I
could be a little biased but no back at the time when I bought my house I was
not a realtor some twenty something years ago so I hope this video was
helpful please give me a thumbs up if you liked it and definitely click the
subscribe button and share it with somebody that might be looking to buy a
house and don’t know if the numbers work for them this is Mark Schreier from century
21 American homes and thanks for watching

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