re: Wall Street: Housing market to see 2nd biggest home price decline since Great Depression

Posted on 10/4/22 at 10:11 am to molsusports

Posted by RedHawk

Baton Rouge

Member since Aug 2007

8964 posts

Posted on 10/4/22 at 10:11 am to molsusports

quote:
The difference in a monthly payment is massive when people go from borrowing at 2.8% to borrowing at 6.8%

I got 2.75% in summer of 21. If I borrowed the same amount of money at 7% it would have been another $1,000 a month in my mortgage.

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Posted by molsusports

Member since Jul 2004

36344 posts

Posted on 10/4/22 at 11:47 am to RedHawk

quote:

I got 2.75% in summer of 21. If I borrowed the same amount of money at 7% it would have been another $1,000 a month in my mortgage

Yes. Assume someone purchased a 500k house with 20% down? At 7% you pay around $2,994/month. At 2.8% you pay around $1,927/month.

Property taxes, insurance, and costs for maintenance are also higher and not included in the calculation

Hard to blame the banks really. They are essentially losing money due to inflation by making the loan. If I had 400k to play with I wouldn't give it to some guy buying a small mcmansion. The return is terrible

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Posted by shel311

McKinney, Texas

Member since Aug 2004

111704 posts

Posted on 10/4/22 at 3:45 pm to RedHawk

quote:
I got 2.75% in summer of 21. If I borrowed the same amount of money at 7% it would have been another $1,000 a month in my mortgage.

I got almost the exact same rate at the exact same time(refi).

Wife is wanting to move soon, never messes with any of our financials, and simply can't grasp this whole interest rate thing and how much more expensive it'll be even for a similarly priced house.