Keep it in Perspective!

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Financing

People are grumbling about mortgage rates. Of course, nobody likes it when things get more expensive, but the truth of the matter is, rates are NOT that high! Yes of course, they are higher than they have been recently, and yes, you do have to go back to 2009 to find average mortgage rates in the 5% range and 2008 when they were last averaging in the 6% area. To be fair, it was only 21 years ago when rates averaged in the 8% range, and you have to go back to 1991 to find 9% and 1990 to see double digits, but before that it was double digits from 1979 for 11 years! Including 1981 & 1982 when rates were 16+%!

So yes, mortgage rates are higher than they were recently, but take a look at the rates on your credit cards! How many people are carrying balances on credit cards that are 15% - 18% - 20+%? What about the cost of gasoline, food, and just about everything else? Have you seen RENTS?

Yes, rates are higher, but we are still seeing many refinances. While significantly lower than the number from last year, it's still amazing that there are as many as there are. Here is what we're seeing.

  1. While rates are higher than they were, it still can make sense to refinance and payoff debt to lower total monthly payments.
  2. Higher rates but a large amount of home equity can make home renovations easier to manage than selling and moving.
  3. Increased numbers of 5/1 – 7/1 – 10/1 ARMS help reduce payment shock while the markets find the new normal.
  4. Some lenders are offering to refinance the loan for free in the future if rates fall back down.
  5. Once again, it can be about VALUE of the total payment being lower, not just the interest rate on one loan.

BOTTOM LINE:

It's important to keep it in perspective by making complete comparisons. When you do, you will see that it’s not actually that high. 

  

Jean Scott Realty 

Mobile:  919-675-5366

E-Mail:  Jean.Scott@kw.com

Website

 

Two Locations to Better Serve You:

Raleigh:              4700 Homewood Ct., Suite 200, Raleigh, NC 27609

Wake Forest:    1744 Heritage Center Dr., Suite 201, Wake Forest, NC 27587

 

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