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Tulsa Mortgage : Podcast 19 – Part 2

Tyler: For the most part, probably about 95% of people actually do a 30-year mortgage versus a 15.
Steve: This is true. I don’t know what the actual statistic is, but based on our customer base – 99. A lot of people– it’s just what people do. It’s just the– “What’s my payment?” And you base it on a 30. Most people don’t ask about a 15. Not because they can’t afford it, I think people just don’t look. They don’t look at their options when it comes to a 15. The only difference between doing a 30-year and 15-year is on a 15-year– [laughs] I didn’t realize that my notable quotable– that I already hit it, but hit that again.  Tulsa Mortgage The difference between doing a 30 and a 15 is on a 15-year I make a 180 payments, and when you do a 30 you make a 180 more.
That right there is [background sound 00:10:05] one heck of a bombshell because 180 plus 180 is 360 and that is what — I don’t know, I mean it seems to me that if I was the big giant conglomerate of bank, you would think if you’re borrowing over a shorter term, you’ll charge a higher interest rate but slower, you know what I mean? Like I’m going to go longer terms, they will give me a lower rate because you’re going to make more interest over the life of the loan, I don’t know. Just what I’m thinking, but maybe not. Maybe I’m crazy, Tyler. Maybe that’s why I’m not the giant conglomerate of the bank.
Tyler: Probably not.
Steve: I’ve already jumped all the way through our notable quotable, our statistic and our stories Tulsa Mortgage.
Tyler: Yes, you have hit the story.
[laughter]
Steve: [unintelligible 00:10:58] stories, so when we talk about action steps [background sounds 00:11:04] – here’s our action steps time. Nobody can hear these on Facebook. In addition to looking at all loan programs that you may qualify for, be sure to look at different terms as well, and we’ve talked about that a minute ago, too. It’s not hard to ask your lender to give you a quote for a different term. 15, 20, 25, you don’t have to do a 15. You’ll get the best interest rate like I said, break in the rate if you do a 15, but you’ll still reduce the compounding interest over the life of your loan significantly by reducing it to a 25 or a 20.
If you haven’t done that and you’re watching on Facebook right now, and you want to look at it, then you should call or go to www.stevecurrington.com, or go to www.getkoalified.com , because we actually just talked to a guy yesterday. Remember that? He’s on a 15. He’s five years in. He wanted to go to a 10 and he’s a doctor, makes a bunch of money. He’s been paying additional principal on his loan. And in his case, what did I tell him, Tyler?
Tyler: Wasn’t worth it Tulsa Mortgage.
Steve: Didn’t make sense, did it?
Tyler: No.
Steve: He was going to literally — he was going to change his current payment that he’s making by 50 dollars. He was going to reduce it, but he’s already, I mean he just paid 12,000 dollars on the principal. I just said, “Keep doing what you’re doing, man. I mean, you owe 300 grand.” I’ve hated to tell a guy I’m not going to do a loan for you. Kicking myself now. What did I do that for, Tyler?
Tyler: [laughs] I talked to [unintelligible 00:12:35] yesterday that she’s still on a 10% interest on a 20-year. Unfortunately, we can’t help her, but there’s still people out there with ridiculously high interests.
Steve: Yes, she had — she didn’t owe much, right?
Tyler: Right.
Steve: She just had a very small balance and that’s another thing that we run into when we’re looking at — if you’re going to go from a 30 to a 30 and you’re going to do a re-finance, make sure that you check what your savings is because it’s really easy to do. “It’s going to cost me three grand. A refinance is going to save me a 100 bucks a month. My breakeven point is 30 months.” That’s easy to do. But in this person’s case, as you’re saying, Tyler, she owed so little on her loan. First of all, we couldn’t do a loan that size. Secondly, even if we did, her going from 10% to four percent was going to save her maybe 35 dollars a month, and it’s going to cost her the same to refinance as anybody.
Now you flip that, now it’s a 100 months that it takes you to pay for it and it’s just not always a good idea. I’ve got one particular client that I get a call from every year that she looks at refinancing and every year I tell her, “It’s not worth it, because you owe 67,000 bucks and yes you’re on a” — if you look at the news, you’re on a what you would consider maybe a crappy rate. But is it crappy? If you want a sexy rate that you can brag to your friends about, then lets re-fi. If you actually want to save money [laughs], stay where you’re at. That’s what it comes down to, right, Tyler?
Tyler: That’s it.
Steve: That’s what happens when you [background sound 00:14:16] – that’s the break it down thing.
[laughter]
Steve: Break it down. By the way, we got all kinds of new really cool sounds. [background sound 00:14:25].
Tyler: That’s not a new one.
Steve: Tulsa Mortgage Did we have this one before?
Tyler: Yes.
Steve: I need to go all the way down to [background sound 00:14:35]. What’s funny is I was reading that on the keyboard and I thought it said, “Let’s set it on.”
[laughter]
Steve: Let’s get it on, here’s Ray Charles guys. [background sound 00:14:50]. That’s not a new one either, is it? [background sound 00:14:54]. Anyway, it’s time to be done playing with sounds. So guys, to recap, how much does it increase my payment to go from a 30 to a 15? Ask your lender. They can do that math for you pretty quick. It’s all dependent on your loan size.
Tulsa Mortgage I can give you some scenarios, but it really won’t matter. Your specific loan is going to be what is going to be important. Do I get a lower rate? Yes, you do. You’re going to get a lower rate for a 15 versus a 30. And how much interest do you save? At least half. That’s what it comes down to. Without the break in interest rate that you get, over the life of the loan you’re going to save a ton of money, a ton of money. And that’s it for this episode of the Steve and Tyler show. Thanks for listening, people.
[end of audio 00:15:49]