Gene Mundt - Let's Talk Mortgages & Real Estate!

 

 

     Timing is said to be everything ...

     And whether you live in the Chicagoland area or elsewhere, right now, that has never been more true.  Timing the market ... for stock purchases or buying a home ... is very important.  

     Many people are presently asking themselves,  "Do I jump into the market now?  Or, will values (real estate or stock) begin to rise or fall even more?   

 

     If you've been trying to make your mind up about buying a home  in Chicagoland, or elsewhere across our nation for some time now ... say during much of '2010' ... you personally waited during a period of time that saw stock prices rise 10% or more.  Mortgage interest rates rose too ...  .75%  in just the last 2 months or so.

     Let's do some math with some actual market examples.  Some times just seeing the numbers more clearly demonstrates how the market and interest rate changes really effect your personal bottomline and pocket.

     While you were  thinking about entering the market, that money you kept in "safe" investments or your checking account,  (Safe = Little or No Return) grew very little or possibly none.  But ... 

      * A  $10.00 per share stock  you could have purchased?  It now costs $11.00 per share.

        *  Your dream home purchase and that $150,000 loan you were quoted?  The quote was a  4.25% interest rate  at the bottom of the rate market in '2010'.  That rate has now risen to  5%  and will cost you  $67.00 per MONTH more  on your mortgage payment.

        NOW ... let's extend these figures out even further.  Let's say you hope to be in your new home 10 years or more ...

       The $67.00 per month increase in payment you will now realize on your mortgage, means the following in actual dollars:

      $    804.00 MORE per year in payments

      $ 4,020.00 MORE over 5 years in payments

      $ 8,040.00 MORE over 10 years in payments

      

Need more information?  Let's now look at it from another angle ...  your long term one ...

 Your total dollar monthly payment expenditure for a

30 year Fixed Rate Loan at 5% interest:

$289,983.00

The total dollar montly payment expenditure for a

30 year Fixed Rate Loan at 4.25% interest,

$265,647.00

 

Compare the two dollar amounts and you find that:

By waiting, you LOST the lower interest rate ... and that lower interest rate would have saved you  $24,336.00  over the life of your loan!

       Right now, many mortgage experts are predicting that interest rates will rise an additional .25% during '2011'.  Some are predicting even higher increases.  What happens to your monthly mortgage payment, should that happen?  Again, let's do the math based on the $150,00 mortgage and the  $90.00 per month increase  you will realize with this new, higher interest rate:

        $90.00 per month increase in payment on your mortgage means the following in actual dollars:    

 $  1,080 MORE per year in payments 

$  5,400 MORE over 5 years in payments

$10,800 MORE over 10 years in payments

 

       The numbers and comparisons can go on endlessly, but let me ask you this ...  

       Is it worth taking the chance that the seller is going to drop the price on your dream home another $10,000?  Is it worth it to you to take that gamble with your monthly payments?   

      You've heard the old saying, real estate is all about location ... location ... location.  But real estate is also a "numbers" game.  Knowing when to commit to a contract or walk away from buying that home is vitally important and much of it depends on the "numbers" you know and personally have to work with.    

      Be prepared to do your research and homework when entering into the home buying process. Take the time and choose your mortgage lender and realtor very wisely.  Then sit down with your lender and DO THE MATH.  Those numbers ARE YOUR REALITY.

       Educate yourself regarding your personal "tipping point" numbers ... the point of sale negotiation where your waiting for prices to drop just doesn't make hard numbers sense for you any longer.  THAT is where your decision to work with an educated and experienced professional lender will truly payoff for you. 

 

       Buy Now ... or Buy Later?  Remember, the Numbers Don't Lie ...

 

        *  Call Gene Mundt, Chicago Bancorp, when you want mortgage and credit information and answers. When YOU want to do the math and discover your reality and "tipping numbers" ... Contact Gene Mundt at Chicago Bancorp at:  http://www.genemundt.com/Contact-Info.html.   I have 35 years of mortgage experience and knowledge that will help you make wise financial decisions and move you to the Closing Table successfully when buying a home. 

        To expedite your mortgage processing, please go to:  http://www.genemundt.com/Application-Info.html, for the documents and information you will need for mortgage application.   I look forward to speaking to you soon!