If you’ve been putting off finally applying for and taking out a mortgage on a new home, now may finally be the perfect time to do so.
While the future of home prices is always in flux, the current mortgage rates just dropped to the lowest point in almost two years, making it the most affordable time to buy a house. Combined with the volume of available homes and refinance options, there hasn’t been a better time to purchase a new home in recent memory.
The Mortgage Rate Drop
Most home mortgages are at the 30-year time span. Previously, a 30-year fixed-rate mortgage sat at 4.23 percent. However, this percentage point dropped to 4.12. Now, you do need to have a 20 percent down payment to quality for this kind of a rate. However, this time last year the 30-year rate was 4.83 percent. This is a substantial 71 point drop, which over the course of 30 years can end up saving you thousands upon thousands of dollars.
There has been a sizable increase in available volume for home buyers. In fact, there has been an increase of 41 percent over the previous year. Now, it is important to note that this increase in available volume is most for the “move-up” style of house. In other words, the volume isn’t specifically for the starter house. It is for the middle-tier home to the more luxury offering. So, while you may not find an expanse of options if you’re on the market for a starter house, larger homes and homes in improved neighborhoods are widely available.
Excellent Time To Refinance
If you currently own a home and are not looking to purchase a new property (or upgrade to a larger house), now may be the time to refinance your mortgage. With the drop off of the average 30-year fixed-rate mortgage, it may be possible for you to save hundreds of dollars every single month.
That is a nice chunk of change back in your pocket without putting in any more work at the office. Even if you just bought your home a year ago, it is important to take advantage of this interest rate drop off. At nearly once percent, the difference is enough to make it worth refinancing your home.
Impossible To See The Future
There are some who see the interest rate drop and will hold out on buying a home because they expect the rates to drop even further. If you’re not ready to go and buy a home than don’t force yourself. The last thing you want is to cause financial strife in your life because you apply for a home mortgage when you are not ready (either personally or financially). However, if you are ready to buy a home and you’ve been waiting for the right time, now is likely when you should move, as it is impossible to know what might happen with future rates.
Yes, future mortgage rates might drop. However, these numbers are always in flux, and depending on both the current economy and what happens elsewhere, the interest rate can just as easily jump. If you wait to apply for a mortgage and it jumps a half a percentage point, this can end up costing you tens of thousands of dollars over the course of your loan. You can always refinance later if the mortgage rates continue to drop. However, you can’t go back in time if you miss out.
If you’ve been looking for the right time to buy a home, now is the perfect opportunity to apply for a mortgage and buy your next home.