Cheap mortgages

 Cheap mortgages in Florida

Cheap mortgages can still be found everywhere if you have a half decent credit score and a job, but many people are being scared out of buying a home when now is probably their best opportunity to get on the housing ladder. According to the Bankrate.com national survey of large lenders, the benchmark 30-year fixed-rate mortgage rose to 4.48 percent from 4.43 percent the previous week. This triggered all kinds of headlines about slowing markets, poor value for money and a whole host of other things. Obviously sensationalist headlines sell, but let’s take a closer look.

4.48% is still REALLY LOW

 

Historical mortgage graph

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

On Friday 30th of October in 1981, the mortgage rate was 18.44%. At the same time the median house price was $69,600 (http://www.census.gov/const/uspricemon.pdf). If you borrowed the full amount your monthly payments would have been approximately $1,146.45.

In April 2014 you could borrow $180,000 over the same 30 year period and your monthly payments would be approximately $1,209.52 which is basically only $50 more per month than 33 years ago.

According to Zillow (http://www.zillow.com/fl/home-values/) the median home value in Florida is $155,200.  The median price of homes currently listed in Florida is $208,746 while the median price of homes that sold is $166,450.

The median house price in 2014 is pretty much 3 times higher than it was in 1981, yet the monthly repayment is only 5% higher in monetary terms.

There will be parents and grandparents all over the country right now, telling you how they used to pay 18% on their mortgage and how hard it was to meet payments but through it all they finally owned their home outright. Let’s be honest, anything under 7.5% is a steal.

Forget about the headlines which are solely targeting families who got caught up in the last bubble and first time buyers who are too young to remember double digit interest rates. Property is VERY AFFORDABLE and mortgage rates are still VERY AFFORDABLE.  If you are unable to buy a property now the likelihood is you won’t be buying one for many years to come.

 

 

 

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