Many borrowers are confused because of the media and their focus on low low interest rates. Borrowers keep on hearing about 4% interest rates and get excited on this DREAM of having the lowest payment possible. Below I will give a scenario as to why these borrowers shouldn't wait for their 4% dream to come true.
Example: A borrower has a 6.5% interest rate because rates were higher when they purchased or refinanced the first time. They are offered a 5% or 4.75% rate, which offers savings of $300 per month. They watch the news and hear about this 4% rate or this 4.5% rate and continue to wait to save more money.
THE PROBLEM: If they wait and wait for this rate to come (because of extra monthly savings) they are completely missing out $300 every month that they wait, simply because they want to save $330 per month. 3 months go by and they lost out on $900 of monthly savings they could've had with just a little higher of a rate.
Let's say they get the 4.5% and save an extra $30 per month at that time. It will now take them 2.5 years to recover the savings that they could've had during the months they waited for a better interest rate. This is IF rates come down to unseen level.
Educate clients and help them understand REALITY...
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