Top 4 Mortgage Myths on the Internet
Please get off the internet, or at least read the entire page and then still ask questions. If I get one more person who asks me about something that they read on the internet, that’s not even close to true, mostly because they didn’t read through it, I’m going to lose more hair. I already have.
Let’s have some fun with this. Let’s talk about a couple Internet myths about the current mortgage market. Chris, I want to get a 40 year mortgage. No, it doesn’t exist. The 40 year mortgage was an announcement by FHA that says if you need a loan modification, which means you need help with your payments, you’ve had financial hardships. If you need a modification, we’ll give you a 40 year term to help spread out those payments.It is a really good thing for people who are experiencing financial difficulty. But you can’t get a four year mortgage doesn’t exist.
Number two, Chris, inflation is coming down, but I hear mortgage rates are going up. No. If you subscribe to our YouTube channel or listen to anything I say, you’ll know that mortgage rates fall as inflation continues to dip a little bit. We’ll get to experience lower rates. Yes, we could have some market days where the economy’s good and rates go up a little bit. But for the most part, lower inflation is lower interest rates.
Number three, Chris. Interest rates are so high, all we have less home sales. No, we don’t have lower home sales because interest rates are high. We have lower home sales because we have an inventory challenge as a shortage over 40% of every buyer in today’s markets, a first time home buyer. The move up buyers are slowing down the market. They got rates at two and a half, two and three quarters percent. They don’t want to buy a new home at six and a half percent. So the higher rates are not slowing down the market. It’s a lack of inventory.
Finally, Chris, if there’s less home sales, the value should be coming down. No. Econ one on one. Supply and demand. The reason home prices are not dropping, it’s because we have a supply issue. There are not enough homes for the amount of buyers. So when there’s a low supply and high demand, the prices go up.
If you have any more questions to distill some mortgage myths or anything related to mortgage real estate, please reach out to me any time. Thanks.
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