Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
Owning a home is part of the American dream for many young professionals, but understanding the long-term implications of obtaining and paying off a mortgage is a critical part of the process.
According to Zillow, the median price of a U.S. home is around $240,000. The average rate of a 30-year fixed-rate mortgage is currently 4.01%.
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By using BankRate’s mortgage calculator and assuming a 4.01% rate on a 30-year, $250,000 mortgage, buyers can get a realistic look at just how much that home will end up costing.
Assuming zero down payment up front (most 30-year mortgages require at least 5%), that $250,000 mortgage will draw $180,193 in interest over the 30-year life of the mortgage. In other words, if you make only the minimum monthly payments on a 30-year mortgage, that $250,000 house will end up costing a total of $430,193.
See Also: Is Now The Time To Buy A House?
Finance Experts Weigh In
Kevin O’Leary recently said Americans should take mortgage payment seriously.
“If you want to find financial freedom, you need to retire all debt — and yes that includes your mortgage,” O’Leary said.
He said Americans should plan on having their entire mortgage paid off by age 45 because they will need the rest of their life to accumulate capital for retirement.
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Personal finance expert Suze Orman has said Americans should make sure to be completely mortgage-free by the time they reach retirement.
“if you’re going to stay living it that house for the rest of your life, pay off that mortgage as soon as you possibly can,” Orman said.
Financial expert Dave Ramsey once said the only thing that should take precedence over paying off a mortgage is retirement investing.
“If you delay retirement investing until after you pay the mortgage, you’re losing valuable time that you won’t be able to make up—even with increased contributions to your retirement accounts,” Ramsey said.
See Also: 6 Common Pieces Of Career Advice That Are Completely Useless
Benzinga’s Take
Home buyers who focus strictly on sticker price and monthly payments and forget the bigger picture can end up paying much more for their house than they think they are paying. Before considering taking on a massive 30-year loan, make sure you understand you will likely ultimately be paying at least $100,000 more than the price of the house.
In addition, Ramsey’s advice of recommending retirement investing over paying off a mortgage assumes investors will get a higher rate of return than the interest rate of their mortgage. Investing in low-risk Treasury bonds or CDs in the current low-rate climate will not get investors anywhere near the 4% interest rate they are paying on their mortgage.
For more information on mortgage lenders check out the 6 Best Online Mortgage Lenders.
Do you agree with this take? Email feedback@benzinga.com with your thoughts.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.