Mortgage rates in SC have hit 1.99%* for 15 year mortgage loans for purchase financing and for REFI loans as per 6/10/21 rates through RateSaver Mortgage (www.RateSaverMortgage.com) with good credit (740+ scores).  The 15 year fixed 1.99% Conventional mortgage rate can be achieved today with LESS than the typical 1% Section A Lender Fees (Origination, Admin, or other lender related fees).  This is unusual even for today’s low rates.  Many times during 2020 and 2021 the 1.99% rate was only available with more than than 1% in total Lender fees, but now 15 year fixed rates are incredibly low and are very affordable.  What does this mean?  A home buyer can AFFORDABLY finance a home for only 15 years INSTEAD of the long term of 30 years saving TENS of THOUSAND in interest versus the 30 year loan. Also, the rate is so low, buyers don’t have to pull as much money from their savings or investments to buy their home. Let’s examine this further…

The great news of the affordable 1.99% 15 year fixed means not having to stretch home payments over 30 long years.  Let’s examine a specific example. A buyer with a 740 credit score purchasing a $250,000. home and putting 20% down (financing $200K), the current rate is 1.99%. That monthly payment is only $1,286.10 (not counting any escrows). VERY low and affordable for such a short term as 15 year fixed.  Cutting 15 years off a 30 year fixed loan would also cut TENS of THOUSANDS of dollars off your interest paid, not to mention paying off your home free and clear by the year 2036, instead of a 30 year fixed not being paid off until 2051 (assuming paying only minimum payments each month). That is a huge difference.

Lastly, the 1.99% 15 year fixed Conventional mortgage rate is so low, it is making it less attractive to draw money from your savings and investments to put more money down.  The argument proposed by some financial advisors and investors is why take money from investments making 3%-10% to finance less of a mortgage when the mortgage rate is only 1.99%. For example, a home buyer with $60,000. in a checking account and $100,000. in a IRA/401K type retirement account averaging 7% per year return buying a $250,000. home can simply put the 20% down of $50,000. from checking and leave the retirement account alone.  Do NOT put $150,000. down because you are drawing from an account averaging 7% return per year. PLUS, you short yourself of emergency funds when you put a large amount of money down and draw so much from your savings. What if a financial emergency came up? Many buyers are putting lower amounts down to keep their investments working and keep their emergency funds fully funded.

Have you consider a 15 year fixed mortgage? Maybe it is time to talk to a mortgage expert. Call Gary The Mortgage Expert (www.GaryTheMortgageExpert.com) and go through all the numbers. A 15 year fixed Conventional loan at 1.99% may save you a lot of money.

-Gary Schoenholz, 864-979-1111, www.GaryTheMortgageExpert.com

*Note rate = 1.99%, APR=2.092% approximately, based today’s 6/10/21 rates on a $250,000 value home, $200,000 loan with 740+ credit score. Loan subject to underwriting approval. Rates subject to daily changes until locked.

Gary Schoenholz NMLS# 107429
RateSaver Mortgage branch
NMLS# 1847969
Licensed in South Carolina