Alabama homeowners benefiting from low mortgage payments

Alabama ranks near the top on the list of states with low mortgage payments. WAAY 31 explains how favorable mortgages affect prospective home buyers.

Posted: Sep 10, 2019 5:41 PM
Updated: Sep 10, 2019 7:19 PM

A strong economy and new jobs attracting more people to the Tennessee Valley are contributing to a booming real estate market. Despite high demand for homes now in Alabama, our state is among the best to get a good mortgage.

Alabama comes in fifth on the list of states with the lowest mortgage payments and lifetime interest. We’re behind West Virginia, Oklahoma, Arkansas and Mississippi.

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The states topping the list typically have more spread-out populations, less demand for urban housing and lower costs of living. 

House buyers may shop for their dream homes. However, busting their budgets could turn into a nightmare.

“It was a very, very large factor,” Angela Jacks told WAAY 31.

She and her husband knew they couldn’t sink too much of their monthly income into their mortgage payment. 

“We didn’t want to be house poor,” Jacks said. “We definitely had a monthly mortgage that we had to meet.

“The big concern right now is if you do find the right house, someone not outbidding you on that house,” a MarMac real estate agent, Caitlin Fite, told WAAY 31.

Lately, sellers are all smiles because homes are in high demand, often selling higher than list price because of competing offers.

“If they’re priced right,” Fite said, “They’re not staying on the market a week, two weeks at the most.”

She says, right now, simply finding a house may be a top priority. However, paying for it is still king. 

“It is a big concern,” Fite said. “Most want a certain number on their house payment and they don’t want to go about that.”

That number five ranking for low mortgage payments isn’t all Alabama has to brag about. The ranking considers more than monthly payments. It also takes into account lifetime interest of your home loan.

“Yes, we had rather be number five because that helps us realtors out a lot,” Fite said.

She points out Alabama’s relatively low average lifetime interest of nearly $72,000 is important.

For home buyers, though, it takes a backseat to monthly payments.

“That number is a very big concern for them,” Fite said.

Numbers crunched from the Federal Reserve and real estate site, Zillow, put Alabama’s average monthly house payment at $493. That’s with 20 percent down and a 30-year loan.

It all depends on how much house you buy and where it is. Even a roomy upscale home Fite showed us on Decatur’s Appaloosa Lane would have about a $1,200 payment.

That’s hundreds cheaper than the states with relatively high average payments.

“They are really just concerned about that ‘What is my payment?’ number,” Fite underscored. “At the end of the day, that’s what everyone’s more concerned about.”

Angela Jacks told us, “We have several children. We would like to be able to put a roof over their head and food on the table and still be able to do some extracurriculars.”

Jacks says she and her husband looked less at curb appeal and more at payment appeal. 

“Always look up front for the bottom line,” she said. “Don’t be afraid to get a house with a lower mortgage that you have to fix up maybe, a little bit.”

At the other end of the spectrum, the places with the highest monthly mortgage payments are Hawaii, District of Columbia, California, Massachusetts and Washington state. Those monthly payments range from about $2,300 at the top end down to nearly $1,500.

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