One of the most critical aspects of purchasing a new home is maximizing your buying power. There is no better way to get the most for your money than to purchase when interest rates are at an all time low. And that time just happens to be right now. The lower the interest rate, the lower your monthly payment will be.

    While interest rates were expected to rise near the year end, they in fact did the opposite and the rates dropped a little further. Although rates are expected to continue to fall, the prior statement is an example that even the best indicators cannot predict the market. Factors affecting interest rates include actions by the Federal Reserve, inflation rates, as well as current events.

    Markets can be volatile, and our best indicator is what is going on today, at this very moment. What we do know is that the current rates on 30 year fixed mortgages are perhaps the lowest we have ever seen. If you take a look back to the 1990’s, it was considered quite the score to get a rate below 7%. Today, with an excellent credit rating, you can find rates below 4%.

    When shopping for rates, you may find even lower options on adjustable rate loans. However, with such a low rate, unless you know with certainty that you don’t plan to own this property for very long, your best bet may be to go with the fixed rate 30 or 15 year loan. The adjustable rate loans became widely popular when rates were higher, giving the consumer more options, and ones that could be especially beneficial should the rates drop. With the record lows we are currently seeing, the rates falling seems more unlikely, so the adjustable option becomes riskier.

    If you purchased a property a few years back and haven’t refinanced, now is the time to take action. Although it takes a little work on your part to refinance an existing mortgage, those few hours of filling out an application and gathering documentation will be worth it when the new lower payment rolls around.

    Keep in mind that interest rates are constantly fluctuating. If you do find a good rate you are comfortable with, you may want to consider locking it in with a mortgage lender. For more information on today’s current rates, getting prequalified for a loan, or mortgage requirements, don’t hesitate to reach out to Ian Poor at Intermountain Mortgage for all of your lending needs.

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