Your Local Michigan Mortgage Specialists

MoveUP Michigan is brought to you by the team of S.M.A.R.T. Mortgage Specialists at Guild Mortgage Grand Rapids. In partnership with WZZM 13, Jonathan Arnold shares his tips for bullet-proofing your buying process to win the bid on your dream home. In this edition, we explore the myriad factors involved in historic low mortgage rates and what that might mean for you!

Key Takeaways on "Rate Factors" with Jonathan Arnold

• Beware of “churn and burn” refi offers
• Individual circumstances should drive refis
• You must calculate your break-even to leverage low rates
• Low rates DO mean more affordability

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It’s NOT All About The Rate!

It’s true that mortgage rates are at a historic low right now – so low that you might be inundated with junk mail, spam, and calls from churn-and-burn mortgage companies. In fact, today’s rates are not so far from the all-time low for the benchmark 30-year rate. which was 3.5 percent in December of 2012. With rates slipping over the past few months, affordability for purchasing is increasing.

For example, a 1 percentage point difference (4.5 to 3.5) on a $250,000 mortgage can mean $144 less per month in mortgage payments.* (See more info at While this is great news, sound financial planning avoids knee-jerk reactions to rate fluctuations. Instead, it’s better to take the long view and do a thorough analysis of the best way to leverage current conditions.

The bottom line is that great rates alone should never drive a new mortgage or refinance application. The benefits are case-by-case, depending on your unique circumstances. That’s where guided, mathematical analysis comes in.

Three Scenarios in the Great Rate Debate

  • Increased affordability is great news for first-time homebuyers who are ready to say goodbye to renting and for those ready to move up to their dream homes.
  • Saving up for a conventional downpayment may not make sense given the rate of housing increases, which would offset the advantage of the lower rate.
  • Existing homeowners who are tempted to refinance need to first determine their break-even point, the length of time they plan to stay in the home, and all their other financial variables.

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Want to see the impact on affordability or analyze your break-even?

What Might Great Rates Mean For You

Looking to run some of the numbers yourself? Our online mortgage calculator makes it fast and easy. You can:

  • Adjust the purchase price
  • Adjust the interest rate
  • Adjust downpayments
  • Review a cost breakdown and amortization schedule
Go To Mortgage Calculator

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