"But someone who obtained a mortgage rate of 5.74% 50 basis points lower and within the typical range for shoppers who compare multiple offers, according to Zillow would pay $2,253 per month and save $1,104 per year. Compared to a borrower with a 6.74% rate, the annual savings amounts to $2,244. Buyers often spend months finding the right home, but only minutes comparing lenders, Karg Ng, senior economist for Zillow Home Loans, said in a statement."
"Even a small difference in rate can meaningfully shrink a mortgage payment and expand the number of homes within reach. Affordability is tough enough today that buyers shouldn't overlook any potential savings. Zillow went on to note that based on November data, the ability to save $1,100 per month would have made an additional 22,000 U.S. homes affordable to a median-income household. The company considered a home affordable if payments didn't exceed 30% of their monthly income."
A borrower securing a 5.74% mortgage rate would pay $2,253 monthly, saving $1,104 annually versus a higher quote and $2,244 annually compared with a 6.74% rate. Small rate differences can substantially reduce monthly payments and expand the set of homes within reach. A $1,100 monthly savings would have made 22,000 additional U.S. homes affordable to a median-income household using a 30% payment-to-income threshold. Many of the newly reachable homes concentrate in Sun Belt markets such as Dallas, Atlanta, Houston, Miami and Phoenix. Only about 30% of consumers submit more than one mortgage application, while observed quote gaps have ranged from roughly 50 basis points typical to 90–130 basis points in past analyses.
Read at www.housingwire.com
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