The Intoxication of Low Interest Rates — A letter from John Inzeo, Vice President, Wisconsin Mortgage Corporation

Facebooktwitterredditpinterestlinkedinmailby feather

Inzeo, John (WMC)Watching the Packer game, I was drawn into all the commercials that advertised low interest rates. From credit cards to furniture, cars to student loans, “LOW INTEREST RATES” was flashed across my television more times than I could count… or handle.


Many lenders try to sell buyers on low interest rates, but ignore the cost to acquire financing. These lenders try to intoxicate the buyer with a low interest rate, while they’re getting ready to blitz. A lower interest rate means NOTHING if you have to over pay to get it. Doing a direct comparison of costs will often times yield substantial savings for the buyer, where we find the difference to be thousands of dollars (that’s right, I said THOUSANDS of dollars).


Two things I would say about the cost to acquire financing for your home purchase:


  1. Don’t get intoxicated by low interest rates. Low interest rates can be the bait to get you to over pay. Always compare offers on the basic of interest rates and total cost to get the rate. Better yet, ask your trusted Wisconsin Mortgage Corporation Loan Officer to walk you through a comparison. Don’t be afraid to ask questions and understand exactly what your options are. A Wisconsin Mortgage Corporation Loan Officer provides consultants to numerous home buyers every year. If your lender doesn’t see this service as part of their job, find a new lender at Wisconsin Mortgage Corporation.


  1. Always remember, in most cases, a portion of the interest you pay on your home loan is tax deductible. This is important to remember when you analyze the impact of interest rate, and interest paid, against the cost to acquire financing. On average, 30% of your interest paid comes back to you as a deduction on your taxes (remember, your tax bracket determines the exact amount). Given the power of a tax deduction, a slightly higher interest rate could be much less of an issue then over paying to acquire financing. Sheltering income with one of the few tax deductions available should be a part of your financial planning strategy. A qualified financial planner or tax preparer can give you solid advice relative to this issue.


As fall has arrived and winter is near, we have begun to see more activity in the market. Many people want to complete their home purchase before the holidays begin. Don’t miss the opportunity to purchase now before prices increase and rates begin to rise. Happy house hunting!



Tags: , , , , , , , , , , , , ,

Categories: Quarterly Newsletter

Leave a Reply

Your email address will not be published. Required fields are marked *

Home Valuation Report