With 30-year fixed rate mortgages at around 6.5% (as of this writing), some people may wonder what they can afford.
A 6.5% 30-year mortgage costs about $632 per $100K per month. Therefore, a $600k mortgage loan would cost about $3,792/month. If rates change, then a 6% mortgage costs about $599 per $100k per month. In this case a $600k mortgage would cost about $3,597 per month.
A 7% mortgage costs about $665 per $100k per month. At this rate a $600k mortgage would cost about $3, 991 per month. A 5.5% mortgage for $600k would run you about $3,400 per month. Real estate taxes, homeowner’s insurance, and flood insurance add to the monthly “nut.” However, renting an apartment nowadays isn’t so cheap and you don’t build equity when you rent.
Remember that you may be able to refinance the mortgage down the road to a lower rate. My first mortgage was at 11.5%. Two years later, I refinanced it down to 9.5%. I even did it once more after this.
The challenge is to have enough downpayment to make the purchase. Veterans and first-time home buyers may be able to make smaller downpayments. The monthly payment would be larger in those cases.
I’d be glad to customize an estimated mortgage cost for you if you need one and/or refer you to a mortgage broker. Please call my agency at 718-490-9463 or visit robinshapirorealty.com.
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