Published February 21, 2023
How to save thousands per year with a higher mortgage interest rate (Huh?)
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I know what you're thinking. That headline makes NO sense, right? At first glance, you would be right.
I wish I had time to call every person I've ever helped with a mortgage in the last five years to explain how I'm helping families every week by moving them into a new mortgage loan, usually with a higher interest rate. Just this past week, I talked with four families who are going to move forward with a cash-out refinance to eliminate something so many are struggling with - debt.
With prices on everything from eggs and ice cream to shoes and cars growing higher by the day, people are relying more on credit cards than ever before. Add that to auto loans and college debt, and it can quickly bury the average household, even those who are still earning as much or more than they were just a few years ago.
The equity in your home could hold the solution. Here's a specific example from a family in Mission who just started a cash-out refinance with my team at Fountain Mortgage.
Current home loan amount - $247,000
Current mortgage rate - 3.875%
Current mortgage payment - $1,944/month
Auto 1 payment - $386
Auto 2 payment - $277
Credit Card 1 payment - $282
Credit Card 2 payment - $186
Student Loan payment - $179___________________________
CURRENT TOTAL MONTHLY PAYMENTS - $3,254
New loan amount - $313,000
New mortgage rate - 6.875%
New mortgage payment - $2,470/month
(All other debts paid off with cash)
____________________
NEW TOTAL MONTHLY PAYMENT - $2,470
The total monthly payments that are eliminated are $1,310 and the increase in the monthly mortgage payment is $526 - a monthly savings of $784. That's an annual savings of $9,408.
What could you do with an extra $500-$1,000 dollars per month? Use your credit cards less or not at all? Put money into a retirement plan?
I would welcome the opportunity to discuss your specific situation and to crunch the numbers for you. If you're in the best loan for your needs, we'll let you know. But if we can help you save money, nothing makes us happier than helping local families make smart financial decisions for their futures.
Consultations and conversations are always free. Contact me below!
TeamKG@fountainmortgage.com
913-850-2690 (text or call)
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