Why are Mortgage Interest Rates Dropping?
Mortgage rates are dropping because world investors are moving their money into the safe haven of US Treasury Bonds. Rates change constantly and economic news, world news, and wall street play a big part in which direction they move.
How can you qualify for the best rate?
At any given time each bank may have slightly different interest rates. So it’s difficult to make sure you get the best rate and closing costs combination because you can’t physically be applying for a loan at all the bank branches around town at the same time. Or can you? Working with a Mortgage Broker helps you by gaining access to many different banks at once. The Mortgage Broker can quickly determine which bank has the best terms and go with them for your new loan.
While getting the best terms is part luck, and part timing, another big factor is working with a knowledgeable mortgage professional. Knowledge is power.
As a home buyer or someone looking to refinance, you will be happy to see rates go down. Rates are nearing lows not seen since last summer. Look at the chart below to see how a drop in rate affects buying power.
In the last 6 months we have seen nearly a 1% drop in rates. That translates into a 10% increase in purchasing power. Meaning you can increase the purchase price by 10% and have the same payment that you would have qualified for just 6 months ago.
Some buyers that were recently priced out of a neighborhood they liked because of rising home prices, may be able to afford it again. If you or someone you know needs a Free Approval to see what the payments will be, click this link Free Approval for an estimate of what you qualify for.
Many recent home buyers will have an opportunity to refinance and lower their rate and payment. Or they could refinance to get rid of PMI. With the 5% Equity and NO PMI loan many will qualify to save money. Follow this link for details on the 5% Equity –NO PMI Loan.