Rates are up today. Markets remain mixed due to the European Debt Crisis and recession fears. Rates remain very low and locking is highly recommended if you didn’t take my advice yesterday. Today’s comparison mortgage rates with no lender fees are 3.875% on a 30 year, 3.25% on a 15 year and 2.75% on a 5/1 ARM. (click here for details)
What a week! I can’t believe it’s already Friday.
Yesterday I announced record low mortgage rates, so today let’s talk about how to take advantage of this opportunity to save money on your housing payment. I’d love to get your thoughts on my recommendations. Some of you won’t agree.
It’s #FollowFriday! If you’re on Twitter, I highly recommend you follow Julie, Shannon, and Richard. They’re great people who put out some great Tweets.
- Julie Kistler (California Realtor)
- Shannon Galpin (Oregon real estate broker)
- Richard Walters (California Realtor for the East Bay and Tri-Valley area)
I give you the details in today’s episode:
Now is the time to take advantage of these rates! Here are two tips to help maximize your benefits of these historic lows:
1. Get a 30-year fixed mortgage!
Most of you think paying off your mortgage is a good thing. Many of you may have it as a personal goal. I hate to burst your bubble, but you are wrong.
In the same way, if you think you’d be in a better financial position with a 15-year mortgage, you are mistaken. Using a 30 year fixed mortgage will allow you to leverage your investment (your house) to maximize your return and put you in a more desirable financial situation.
Sometimes parents are wrong about mortgages.
A 30-year mortgage allows you to be more liquid. As an installment loan (not revolving credit line), each mortgage payment for a 10 or 15 year mortgage is gone. You can’t get that money back without refinancing with cash out.
If you keep the difference in payment between a 15-year and a 30-year mortgage in an investment account, you can still pay your mortgage off in 15 years if you wanted. You would have to do it on one lump sum, though. It may not be a smart idea, but my point is that you could still do it.
You have options! If something bad happens, you are not stuck making a higher payment than you can afford. Think about it before you consider anything less than a 30-year mortgage.
2. Take cash out if you can.
If you qualify for a cash out mortgage, you should take out every dollar that you can and invest it. It’s another way to leverage your investment.
Stocks may be down right now, but that also means they’re cheaper! You can get more bang for your buck.
Don’t cry about your 401K losing money. Do something about it.
Offset your losses by buying more stocks with the cheap money you just borrowed from your best asset: your house!
Some of you may think I’m crazy, but if you call your financial advisor they will tell you the same thing! Still don’t think I’m right? Post your thoughts in the comment section below and let’s talk.
Let’s change the way people shop for a mortgage…forever!
PS. To ask a question, get advice, or find out if you’re getting the best deal possible on your loan, just post a comment below. Daily comparison rates, calculators, and other cool features are available in the free Rates in Motion LoanApp by going to your smart phone and clicking on this link, activation code is 9203780002