With mortgage rates potentially dropping to even lower than record lows, now is an ideal time to buy a new home or refinance your current home. Read more about these record low mortgage rates below, according to an article from CNN.com.
The half a percentage point cut by the Fed on Tuesday brings the benchmark interest rate range down to 1% to 1.25%. That cut, along with a rock-bottom 10-year Treasury yield, means mortgage rates are poised to head even lower.Mortgage rates have already been hovering near historic lows. Last week,rates fell to an average of 3.45% for a 30-year fixed rate mortgage and 2.95% for a 15-year fixed rate mortgage, according to Freddie Mac.
Spring real estate market gets a boost
Volatility in the stock market and uncertainty in the economy doesn’t bolster a home buyer’s confidence, but knocking money off a monthly payment by getting a lower mortgage rate or refinancing can certainly help.
On the cusp of the spring home buying season, these rates are well timed, said Hamrick. But favorable rates alone aren’t necessarily going to bring new buyers into the fold. “Buying a home is a practical purchase,” he said. “You buy because you’re ready and you know how much you want to spend, the timing of the purchase and the location.” But this shift may bring those who were considering buying a home into the market more quickly.
Move now or wait for lower rates?
Knowing when to make the move can be tricky.
If you’re looking to refinance or secure a new mortgage, evaluate the immediate impact it will have on your finances, said Mike Hennessy, a certified financial planner with Harbor Crest Wealth Advisors in Fort Lauderdale. “If you can meaningfully save on your interest costs, build equity quicker, or extract equity at a reasonable cost to fund a renovation project, then take the bird in hand today.”
For a mortgage refinance, start comparing the numbers that are being offered with what you currently have, said Cynthia Meyer, a certified financial planner with Real Life Planning in New Jersey.
“If the new rate is 75 basis points (0.75%) lower than the current rate, that it’s generally going to be worth it to refinance after the costs of the refi,” said Meyer. “If you’re planning to stay in your home, run the numbers to see if it makes sense to refi from a 30- to a 15-year mortgage as well,” she said. “You may be able to pay around the same amount every month and get your house paid off a lot sooner, with lower total interest costs.”
Visit CNN.com to read the full article.