FINANCING YOUR HOME PURCHASE?

Monday, August 26, 2019   /   by Burt Horwitz

FINANCING YOUR HOME PURCHASE?

This is the right time to buy a home - Long-Term Mortgage Rates Are Near Historic Lows. 30-Year 3.55%
Freddie Mac said Thursday that the average rate on the 30 year loan declined to 3.55% from last week’s 3.60%. One year ago, the rate was 4.51%.

QUESTIONS ABOUT BUYING OR SELLING A SOUTH FLORIDA HOME? Contact Burton Horwitz – Realtor with EXP Realty Boca Raton. Go to my website for the most accurate home search: www.southeastfloridahomesource.com/

U.S. long-term mortgage rates are near historically low levels this week with the average on the benchmark 30-year loan falling to its lowest level since November 2016. Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan declined to 3.55% this week, from 3.60% last week. By contrast, the rate stood at 4.51% a year ago. The average mortgage rate for 15-year, fixed-rate home loans eased to 3.03%, from 3.07% last week.

As an example of why to buy when rates are low: Consider a $300,000 home, purchased with a $60,000 down payment, at an interest rate of 5.0% (generally where mortgage rates are in early 2019.) With a $240,000 mortgage loan, the average monthly payment on the property would be $1,288.37, while the total of 360 monthly payments amounts to $463,813.88. More to the point, total interest paid over the entire course of the loan would be $223,813.88.

But what if you can get the same mortgage loan at an interest rate of 4.0%, like many buyers got two or three years ago, when rates were lower?

In that event, the monthly mortgage payment would amount to $1,145.80, while the total mortgage principal and interest payment over 360 months would amount to $412,486.82. Total interest paid over the course of the loan would be $172,486.82 - representing a total savings of over $50,000 on your mortgage interest payments.

That's why it's important to keep a sharp eye on interest rates. All things being equal, and with good credit, a savvy home buyer strikes when rates are lower, and can save a bundle on the deal.
Mortgage rates being low are one factor, another is the calendar is a good barometer for the best time to buy a house. In general, prices are less expensive at the end of the year, especially in December. Primarily, that's because the inventory that's on the market comes from owners who have to sell, and are more willing to negotiate.

Burton Horwitz - Realtor
7280 W Palmetto Park Rd #110
Boca Raton, FL 33433
561-289-5939

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