Welcome to another edition of Mortgage Minute with Matt. Today we have some breaking news about interest rates and I wanted to bring the man himself in to talk about kind of what’s going on.
We are in unprecedented times when it comes to mortgage rates. We’ve never seen them down this low. 30 year fixed rates in the low threes, 15 year fixed rates in the mid twos. It is creating an opportunity for people to save a lot of money. In fact, I had a customer tell me it’s a life changing opportunity for him to refinance into a 15 year fixed and really put his family in a good position. So if you haven’t checked your mortgage statement, it is a fantastic time to get with your current lender. We’d be more than happy to give you an estimate as well to look at rates and see what we can do to save you some money on your mortgage.
So a couple of questions. If a buyer just bought a house. Should they consider refinancing?
Generally lenders have a policy where you need to make at least six payments. Once you’ve done that, then you’re in prime time to look at refinancing.
What if I have an interest rate in the threes now, like let’s say I got 3.75%. Is it worth going to 3.5%? Is there a threshold there?
If all closing costs can be paid by your lender and you see an immediate benefit the first month of your payment, then yes, it makes sense to drop just that little in interest rate.
It depends on how long it’s going to take to recoup closing costs. And the software that I have will show us how long it’s going to take to break even. Does it make sense to refinance? And if it doesn’t, I’ll tell you to stay put where you’re at.
If they decide to refinance then they obviously need to go through the appraisal process correct?
Sometimes. There are many loan transactions now where if there’s enough equity built in the home coupled with the strength of the file that I’m allowed to get a re-finance done without having an appraisal. So our software is what determines that. But I’ve done many of them so far that we don’t need appraisals and that certainly helps speed up the process.
What about buyers currently looking? What does this do for them?
Well, if you’re in a set price range and you can’t really afford much more over this price range at X interest rate with rates dropping the way they have, you can now bump that purchase price up and look for that house in that higher price range. This interest rate drop is going to get you more home because your payments are going to be that much more affordable.
When I say unprecedented times we’re at the start of a busy spring season, buying season, rates are plummeting, people are refinancing, people are buying at a fantastic time.
Is there any other tips and tricks that we should know about during this time?
So it was four years ago, roughly this week that rates were similar to where we are now. They weren’t this low, but I don’t know how long this is going to stick. All this is coming from the economic news and the Coronavirus that’s scared the entire country, to be honest with you all across the world. So, the economic activity that is happening around us is what’s causing rates to do this. It’s contrary to belief. It’s not the feds that are lowering for the federal funding rate that’s dropping rates.
It’s simply the, you’ve seen the stock market kind of crumble over the last week or so. It’s safer to have your money in bonds. And when that happens, interest rates profit from it. And we don’t know how long they’re going to be low, so take advantage while you can and get into these little rates, man. Time is of the essence.
Now’s the time to finish that purchase or refinance that current mortgage loan.
Contact Matt Devine today with Fairway Independent Mortgage to find out how this interest rate drop helps you: