Thinking About Buying a Home?
Have you been considering a home purchase? For most people, buying a home is the biggest investment you will make, particularly in Southern California. The question of when to buy is something that needs careful consideration. It is important to get wise counsel on how much of your discretionary income should be spent on a mortgage. If you have decided the time is right to buy a home, then it may make sense to buy sooner rather than later.
It’s all a numbers game. Right now interest rates are hovering around 4.3%. According to Freddie Mac, projections are for mortgage rates to climb to 5.1% next year. It’s called The Cost of Waiting to Buy. How much additional money would it take if interest rates increased as they are predicted to do? So we got our calculators and did some math that is pretty eye-opening.
Crunching the Numbers
For ease of calculating, we will look at the difference between 4% and 5% interest rates on a $500,000 mortgage and a $750,000 mortgage, to be paid out over 30 years. Look at these numbers and consider the savings to buying now.
$500,000 – 30 year loan
4% Interest Rate
Monthly payment: $2,387
30 year cost with interest: $859,348
5% Interest Rate
Monthly payment: $2,684
Annual: $32,209 3
30 year cost with interest: $966,280
30 year: $106,932
Now let’s look at a $750,000 loan over 30 years.
$750,000 – 30 year loan
4% Interest Rate
Monthly payment: $3,581
30 year cost with interest: $1,289,020
5% Interest Rate
Monthly payment: $4,026
30 year cost with interest: $1,449,417
30 year: $160,397
So you would be saving between $106K – $160K depending on the price of your home.
What if you took the monthly savings by taking out a loan at a lower interest rate? If you reinvested the monthly savings, at a conservative 8% rate of return over 30 years, you would have an incredible nest egg!
$500,000: $297/mo @8% = $442,636
$750,000: $446/mo @8% = $647,700
At LoanLeaders of America, we adhere to our Business Philosophy and Strategy to provide high quality mortgage loans, at the most affordable rates, using a wide variety of Mortgage Lenders to find the one that is right for you. We also have a vast selection of Mortgage Loan Programs.
Since we were established in 1997, LoanLeaders of America has managed to be ranked in the top 25 Nationwide Wholesale Lenders by the National Association of Mortgage Bankers year after year. Since our beginnings, LoanLeaders of America has remained one of the nation’s top originators of residential mortgages. As a direct lender, LoanLeaders of America is known for our ability to close a loan in as little as 2 weeks. LoanLeaders of America knows that great rates are not enough, so we work diligently to maintain an exceptionally high level of service. Contact us to see how we can assist you!
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Let me start by saying thank you, thank you Rob Davidson of Loan Leaders for helping me with my Loan for a second time. That’s right, for the second time. Rob’s attention to detail and market knowledge played a crucial role in determining when exactly to apply and lock interest rates. Rob will take the time to explain every step in the process and ensure you obtain the best Loan possible for you unique set of circumstances. His professionalism, attitude and kindness shines through in everything he does. You simply can’t go wrong with Rob Davidson at the Helm.
Many Thanks Rob, it was a pleasure to work with you once again.Brian L. from Riverside, CA
Extremely helpful and professional throughout the whole home buying process. Danny Schultz was available for anything we needed and treated every request with the urgency and efficiency you look for when dealing with the stressful task of buying a house. I have already recommended Loanleaders of America to my friends and family and will definitely continue too in the future. Thank you so much to Danny and the whole team at Loanleaders for making us feel like we were in good hands throughout every step of the way! If there was an option for more than 5 stars, this team deserves it!Jake M. from Chino, CA
First of all, thank you so much for the wonderful experience you provided during my home refinance. Andrew and Gina provided excellent service and communication. I will certainly be referring them and LoanLeaders to anyone I know who is looking for a loan. Thanks again!
Ann’ette P. from Woodland, WA
I would like to start off by saying that it was a pleasure to work with Zachary. He exemplifies what is to be considerate of the customer. He was always on his A game in helping in anyway that he could. He made himself available at all times and was very knowledgeable as well. Thanks for having him as a part of your team. He is truly an asset!Barrin H. from Homestead, FL
Jason was phenomenal! He worked with us through our issues, and helped us quickly with every roadblock we ran into. I definitely would recommend this mortgage company to anyone I know.Adam M from Elkins Park, PA
Rob has assisted my husband, myself and our families with many, many refinances over the past 7 years. He is very knowledgeable, responsive and goes the extra mile to find the right solution for each client. I would recommend him without hesitation!R Marienlun from Martinez, CA
Jeff did a great job for us with no problems closed on time was very helpful with all our questions. Even a couple years after the transaction was completed he is still there to help answer any questions that may come up.M Reimbold from Yorba Linda, CA