interest rates

Interest Rate Hikes, Inflation and YOUR Payment

posted in: Mortgages

In last week’s blog I mentioned, albeit briefly, that the fed will be increasing interest rates. These increases are expected within the next 24 hours. Mortgage companies do their best to offer rates that the company and the market can bear, however, if the change that is expected is a lot higher than expected, YOU can expect higher rates being offered as a direct result. Another factor to look at that many people seem to overlook is the blended rate they are paying on a mortgage, car note, and credit cards. At the beginning of the payment schedule, the majority of the payment goes toward the interest that is due, NOT the principal. The solution is for you to make the call to 7th Level Mortgage and get the application started, TODAY.

I am going to lay out for you since I am a “numbers kind of guy”, the mathematics and numbers of two scenarios. The overriding question at the end of this article will be, “Do you want to gamble?”

Name                         Amount                     Rate           Term                Payment/Month


Mortgage I                 200,000                      4.5%            30y                     1013

Mortgage II                   25000                      6.0%            REV                     150

Car Note                        25000                      6.27%            5y                        486

Credit Cards                  30000                       16.17%        REV                    408

Total                            280000                       6.042%        ——                  2057


New Mortgage            280000                        3.6%                30y                  1273


SAVINGS                                                                                                      $784/month


The next step is for you to consider your options as to what to do with the savings! Perhaps you would like to apply some of the savings to the principal amount owed on your mortgage. Maybe you have small children and want to start saving for their college education, a car, or a daughter’s wedding. The options for potential savings are unlimited. There is no need for you to wait for lower rates (so you can unlikely save an additional $20.00 per month), gamble with a market that is feeling nervous and jittery about the Russian/Ukrainian situation, higher inflation, and higher gas prices. Looking this particular gift horse in the mouth is an unwarranted gamble.

Another way to look at this scenario is to not only blend all the payments but at the same time refinance into a shorter term as well. This would be ideal for people my age. I am 60 and am getting close to age 67 which is when we are supposed to retire. Would you really want a mortgage payment hanging over your head at age 80?

New Mortgage           $280000                                  3.56%               15y                  2010


As one can clearly see, the rate is much lower than the blended rate of 6.042% but the monthly payment savings is $47.00. Although the monthly payment savings is small in comparison to the 30-year fixed payment, the real savings is in the form of interest saved. The interest savings is 96,495 over 15 years. Monthly, the interest savings is 536.33.  With all of this said, there is no reason to wait. The time to plan for your future is today, not tomorrow, and certainly not next week. The professionals at 7th Level Mortgage can lay out the whole strategy for you as to the application process (with all the options available to you), the processing of the loan, the appraisal, and everything else you need so the process is streamlined, simple and quick. They will coordinate with a closer in your area so when you go to closing, all the documents that are needed are there and ready for signature. In some cases, depending on when you close, you may even have a one-month reprieve in making a mortgage payment!

Both of the scenarios represent a win-win situation for you. If you select the 30-year option, you will no longer have to keep track of mortgage due dates, car note payments, or late notices on credit card payments and you will have enough security monthly to offset ever-increasing prices for food, gas, and other life’s necessities. Should you select the 15-year option, you will save almost $100,000 in interest paid out over 15 years. Like the 30 year option, you will have one payment instead of five, no more missed payments and a lot more equity in your largest investment (your home) at a highly accelerated rate. Do you want to gamble?  Call 7th Level Mortgage TODAY!