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Oh Please! Show Your Nose A Little Love!

A number of noses landed on the ground last week across America according to CNNMoney.com.

For the first time in a few weeks, mortgage rates rose above 5% and mortgage applications took a 14% dive. The result? Home buyers and homeowners by the droves cut off their nose to spite their face.

But let's consider this logically. By drawing the line at 4.99% and refusing to budge, you are merely cutting off your own nose.

Take these numbers for example. A 30 year monthly house payment for $200,000 at 4.99% is $1073. Now raise that rate to 5.04%. Your payment rose $6.

$6!

Yes, I know! One rate boasts the 4's compared to the unwelcome stigma of 5%. (a little sarcasm)

But PLEASE do your pretty face a favor. Keep your nose. $6 a month is not worth losing a mortgage rate lower than we've seen in many years because you determined you wouldn't go over 5%.

Let's prove my point with YOUR mortgage. Follow the link to my easy squeezy mortgage payment calculator. Insert the amount you owe on your house. Instead of drawing the line at a certain mortgage rate that you've been holding out for, calculate a payment using a few different interest rates. Try 5.01% or even (gasp) 5.25%.

Experiment! It's free! But considered yourself warned. Once you begin playing around with my easy to use calculator, you may never be able to stop!

Your friend, Kate Ford

My Way Of Giving Back - THE PAINLESS SIGN-UP - For Real Estate Agents and Mortgage Lenders

Realtors, what are you waiting for? Promote your profile 24 hours a day, 7 days a week => Kate's Real Estate Directory USA and yes, it's free!

Mortgage Lenders, take advantage of this today. Reaching homeowners around the clock => Kate's List of Mortgage Companies and yes, it's free!

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You can find the full article at CNNMoney.com

Posted by Kate Ford Mortgage Translator on 10/22/2009 07:42 AM

Comments (23)

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23 Comments on Oh Please! Show Your Nose A Little Love!

OCT

Kate, great post. Remember just a few months ago when 6 % was a great rate. Our world needs stable policies and consistent leadership. Otherwise the consumer flakes out over "nothing".

Terry, It is not a pretty thought for us to be walking around without a nose.

Kate, it's almost funny that people consider 5% high now.

Jeff, if you were a nose, you might not think so. :) Kate

Kate - I don't understand the spoiled mindset we've grown accustomed to. I suppose part of it is on us for pushing "historically low rates" as the major selling point in garnering business.

And what is this Listing for Mortgage Companies? Hmmm, perhaps I'll add Sardi Mortgage, Inc;)

Hey Jason, nothin' wrong with advertising historically low rates as long as we protect our faces... and mortgages.

Yes! Add Jason Sardi to the List of Mortgage Companies in Pennsylvania. [I will update it later to Sardi Mortgage after you break out the fatigues.]

Kate - I think the rate "hang-up" sometimes relates to the ability to brag that you have the lowest rate among your friends. It wasn't that long ago when borrowers were excited to have a rate below 10%!

John, I usually inspired a laugh or two suggesting to borrowers to lie about their interest rate at the next neighborhood bbq if rates ticked up before locking. "You locked-in 4.5%? Well I got 4.4%" :)

It's back to that psychological .99 as opposed to the next BIG number - 5. Same with housing. They are listed at $599,000 instead of $600,000.

Hey, Kate, I keep meaning to ask how you made your banner? I love it.

Jane, K-Mart pricing, right?

Upload image to Picnik, go to "Create" then "Text" You'll see color, font and sizing options. Thanks! Kate

Thank you.

Kate: I suppose I'm showing just how long I've been in the mortgage biz when I say I remember the rates when they were in their teens! Now THOSE rates were painful ... so hearing people whine at today's fluctuations almost makes me chuckle. It also is a little frustrating at times ...

Gene

Hi Gene! Yep I agree. Refusing to budge because mortgage rates rose over 5%? It just doesn't make sense.

Kate, anyne who sneers at 6% needs to go live in 80's when rates were about 18%. Figure that payment.

Kate,

It's a rather curious mindset many a consumer has over certain thresholds. I don't know what the cure is but the pharmaceutical people should find a pill for this.

OCT

Kate,

I remember buying a place in the 80's at 19.75%. What possessed me?

Terry, the first between us to venture into real estate, Steve got his broker's license in 1980. What the heck ever made us think THAT was a good direction to take! Our career move also made him an instant lending specialist because the only homes selling in our area of So CA were financed by sellers.

Esko, Quick! Get a jump on it before the pharmaceutical companies do. You will be a 21st century hero.

Barbara, 30 year term, $200,000 @ 18% = an eye popping $3015

Compare to

4.99% $1073

5.04% $1079

The verdict is in: Save your nose! Lock in your rate!

OCT

Kate you bring up a good point here. People need not draw the line in the sand with the interest rate. They need to look at the monthly investment they are comfortable with and keep the difference in perspective!

Diane, thanks for commenting. Another two key points --

1) After locking, do not look backward with hindsight to second guess your choice.

2) After locking, do not shoot the messenger! (the mortgage professional)

:) Kate

Hi Kate: This hit home all too much with me. I had a borrower 4 years ago who had a 6% interest rate. I offered him a 5.5% no points and no closing cost refi. He wouldn't take it. He said he would wait for rates to drop to 5% with zero zero. Guess what - 4 years later and he is still waiting - I know because he still calls every once in a while. That $50 a month savings that he passed up would have added up to $2,500 in savings by now.

Matt, sadly, such a familiar story. Hey, I went back and re-read your profile. You have an interesting background supporting your current endeavors. Anyone who doesn't know Matt real well, should take a moment to read about Matt Listro here and how he can help you.

OCT

Mrs Kate,

If that scares them, then how about this.

Nutsy is very scared in his Halloween costume. I hope that this does not make people so scared that they cannot control themselves. Please repeat after me: "Nutsy is the man."

Nutsy

If WHAT scares WHO? More nonsense brought to us by the makers of Nutsy.

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