When it comes time to getting a loan, it does not appear that it is going to get much better than what it is right now. Interest rates have dropped even more than previously, and it is about to break record lows. This will allow home buyers to be able to get a home with amazingly low interest rates.
CBSNews reported that the latest information from Freddie Mac indicated that the 30-year fixed rate mortgage did set a new record this week. The interest rates on this type of mortgage had dropped a full percentage point than what it was in the previous year. Currently, this puts them on an average of 3.49 percent.
When the interest rate is lowered by one percent, this ends up being quite a savings. According to WalletBlog, this would mean a savings of about $30,000 on a $200,000 mortgage, if you paid it off according to the life of the mortgage.
Mortgage rates had been higher in the week before, and they have been dropping for some time. This means that it could be the ideal time to buy a house, or to refinance one.
Other mortgages have also lowered their interest rates, too. A 15-year mortgage last week averaged 2.80 percent, which is down from the 2.83 percent that it was the week before. Five-year Treasury indexed adjustable rate mortgages are also still lower than last year, which was 3.25 percent, and they are now at 2.69 percent.
At the present interest rate on a 30-year fixed rate mortgage, this would amount to a little more than $50 savings per month compared last year. A 15-year mortgage would save you about $40 per month, according to Money.CNN.
Housing prices have also been low and many banks are starting to loosen up and give more mortgages. Your credit will have to be good, though.
The Mortgage Bankers Association reported a record high volume of applications for new mortgage loans. They said that as many as 81 percent of all mortgage applications came from people who wanted to refinance their existing mortgages. Unfortunately, Money.CNN reports that many people who apply for a refinance are turned down because their home is no longer worth the desired loan amount. The same article mentioned that it is easier now to get a new mortgage than it is to get a refinance.
It appears that the decline in bank rates is largely because of the economic problems in Europe. Just how long it will continue to have this influence is unknown, which means that potential borrowers may not want to wait very long.
Whether or not this is the ideal time to get a new home or refinance will depend on what your personal goals are, as well as how long you think you might continue to live in the house. It is quite possible, that if your mortgage has loan rates higher than five percent, that you should probably consider getting a refinance which would likely give you much better interest rates, which would enable you to save a lot of money.