MORTGAGE NEWS
Stop Paying Someone Else’s Mortgage In June 2020, a young woman who was renting a home with 2 friends in the Eastown area decided to stop renting and to buy a home only a few doors down from their rental. Their rent the year before was $1100 for a 3 bed 1 bath. By taking advantage of a low down payment and interest rate, she was able to buy a very similar 3 bed 1.5 bath home. Her new monthly payment, including taxes, principal, and insurance, is $800. One of her former roommates even decided to move in and now pays her rent of $500 per month, making the new home owner’s monthly housing expense only $300—a big savings over renting, all while gaining equity.
4
Low Rates Mean Increased Buying Power
Immediate Savings Via Refinance
Despite a very competitive landscape with low
In July 2020, a current home owner refinanced
inventory, homebuyers looking to purchase in West
his home which he had purchased 2 years ago.
Michigan have never had more buying power.
He went from a 3.875% interest rate down to a
Recently, a young woman who, based on income
3.125% interest rate. Due to his loan size and
and credit obligations, was previously pre-
other factors, his monthly savings was $355 per
approved up to $250,000 at a rate of 4%. With
month—over $4,000 in the first year alone.
rates at historic lows, she is now pre-approved
Another borrower who used lower interest rates
up to $300,000 at a rate of 2.75%. This increase
to her advantage was Renee, whose interest rate
in buying power could help expand her search to
was a 5.75% and was able to refinance her loan
areas she hasn’t yet considered, or help her buy
to a new low rate of 3.625% for a savings of $285
the same house while staying within budget.
per month—over $3,000 in the first year.
