The whole world seems to be in a bit of a mass hysteria right now. Toilet paper is scarce, grocery store shelves are empty and if I didn’t know any better, I’d say the zombies were coming! With the financial markets continuing to plunge daily, the similarities are all too familiar and reminiscent of the Dotcom and housing bubbles of the past. If you are a homeowner or preparing to be, this is your time to shine.
More than likely, the biggest asset you’ll ever own is your home. Similarly, (my 5th grade English teacher taught my class that word and we all burst into laughter because we didn’t think it was a real word, but I digress), the biggest expense you’ll ever have, is your mortgage. If you look at financing your home in the same way you do a good discount or sale, you’re looking at your asset in the correct way.
Have you ever purchased something at the beginning of the season for one price say, a shirt for $150, and months or weeks later come to the same store and find that same shirt you paid $150 for, now marked down 50% to $75? Does that piss you off like it does me? If I purchased it for $150, I’m big mad, but if I’m fortunate enough to grab it for $75, I think the rest of the people who originally paid $150 are suckers! Your mortgage is no different!
Mortgage interest rates are at historic lows (under 3.5% right now) and if you have a mortgage interest rate of 4% or higher, you are essentially paying $150 for that shirt when you could be buying it for much less! Let’s look at an example.
If you have a $250,000 mortgage with an interest rate of 4%, your total interest paid over 30 years would be $179,853. On that same $250,000 mortgage, an interest rate of 3.5% would rack up total interest for 30 years of $154,308. That’s a difference of over $25,000! Now, I’m aware 25 racks won’t allow you to retire early, but it’s significant enough to make a difference in your overall financial picture.
Simple math tells you to take advantage of this turbulent time. In March 2019 mortgage rates were 4.3%, in 2018, they were 4.5% and in 2017, they were 4.2%. Refinancing to a lower interest rate will increase your cash flow. I don’t care if you just refinanced or purchased yesterday! Using our t-shirt example, refinancing to take advantage of these lower interest rates is like buying the $150 t-shirt and taking it back to the store for a refund of $75. Who wouldn’t want to do that?!?
If you want to be super smart and savvy, the freed up cash shouldn’t be used for the turn up! Take that cash that you’re used to paying anyway and pay down credit card debt or use it to grow your retirement accounts. The possibilities are endless when you stop sitting on your assets and get your cash!
Don’t be a sucker! If you’re interested in seeing just how low you can go and seeing how much cash can be freed up for you, schedule a free consult today. I can help you review your options. If you’re ready to purchase or would like to be soon, let’s chat about those options too!