Mortgage interest rates dropped in the last couple weeks – they have been dropping since last fall. Last year everyone expected interest rates would continue to climb as they had been, then the Fed made an announcement after their last meeting – they are planning to start buying bonds again! Rates dropped which will help anyone looking to buy a home!
So the big question is how long will this last and should we look at refinancing? No one knows how long it will last or how much rates might drop. They have gone up a bit since last week but are still lower than they had been. Interest rates were about 5% or higher in November which did affect home sales in December and January. Since then they have slowly been dropping. Last week they dropped again – they vary based on your credit score and what you are doing (purchase, rate term refinance or a cash out refi). Your loan to value will also affect your rates.
Should you look at refinancing? If you have been in your home for a couple years and have a FHA mortgage, it may make sense to look at refinancing to a conventional loan. That way you can look at getting rid of mortgage insurance – maybe not immediately but it will be an option with a conventional mortgage. FHA mortgage insurance will not go away normally. Do you have an adjustable mortgage? Now could be a great time to refinance to a fixed rate mortgage -depending on how long you plan to stay in your home.
Are you thinking about buying? With interest rates a bit lower, it will help you qualify for more of a home -it can be a great time to buy! Looking at the 30-year fixed rate on a $300,000 mortgage, every 25 basis point move down means a savings of $50 on a monthly payment. With the rate now down about 75 basis points from November, that’s a savings of $150 per month.
Check with your loan officer or call me with questions – it may be the best time this year to purchase a new home! Find out what you need to do to get approved or if it makes sense to refinance!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc., An Equal Housing Lender, NMLS#150953 – Email – Website
