🏡How much house can I afford? Interest rates are at all time lows. Is this the perfect time to buy your first house or refinance your current mortgage?
Two of the most common questions realtors get asked all the time.
🤔Is now the right time to to buy?
🤔Is now the right time to refinance?
In this video I will share with you information and tools to help guide you in the right direction.
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
