A 7.5% 30 year mortgage is insane, more commonly you will get a 15-20 year 3-5% interest loan depending on the bank and market.
The reason it’s recommended to stay away from 30 year or longer loans, is that you have to deal with the very real threat of inflation for such a long period of time. The purchasing power of $300,000 in 1994 (30 years ago) would be equal to approximately $636,429.08 currently due to inflation. Because of that, the bank has to make good on the massive loss that they’ll take from inflation, causing you to pay significantly more in interest.
All of that still doesn’t mean that banks won’t do everything they can to scalp you of everything you have.
It’s a horrific market currently, and the 7-9% interest rate range is insane. Thankfully with how interest rates fluctuate, and with it being expected the fed will pull back their inflationary policies in September, it can reasonably be assumed that rates will fall to a much more manageable level by the end of the year or early 2025.
Plus 2019 was a buyers market with very good interest rates in the low 3% range, which imploded further with Covid to record lows of 2%.
With how the housing market is right now, holding off and waiting is definitely the best option. It is the worst possible time to get a fixed rate.
A 7.5% 30 year mortgage is insane, more commonly you will get a 15-20 year 3-5% interest loan depending on the bank and market.
The reason it’s recommended to stay away from 30 year or longer loans, is that you have to deal with the very real threat of inflation for such a long period of time. The purchasing power of $300,000 in 1994 (30 years ago) would be equal to approximately $636,429.08 currently due to inflation. Because of that, the bank has to make good on the massive loss that they’ll take from inflation, causing you to pay significantly more in interest.
All of that still doesn’t mean that banks won’t do everything they can to scalp you of everything you have.
7.5% is a lot closer to what’s getting offered now. It’s really insane.
It’s a horrific market currently, and the 7-9% interest rate range is insane. Thankfully with how interest rates fluctuate, and with it being expected the fed will pull back their inflationary policies in September, it can reasonably be assumed that rates will fall to a much more manageable level by the end of the year or early 2025.
Plus 2019 was a buyers market with very good interest rates in the low 3% range, which imploded further with Covid to record lows of 2%.
With how the housing market is right now, holding off and waiting is definitely the best option. It is the worst possible time to get a fixed rate.
Yeah, it’s not great. Hopefully people who need to could refinance when rates lower.
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were you going for a double negative (won’t do everything they can) in the last sentence
I was, thanks for letting me know!