Bold and Low Interest Rates In 50 Years.
If your New Year’s resolution centers on buying a home, there are THREE big things going on that you should know about. First, start your New Year off right because all the stars are aligned for you;
1. Mortgage interest rates have dropped to the lowest they’ve been in 50 years. With mortgage rates at historic lows, the number of people applying for mortgages has hit near record highs. If you’ve never been one to jump on the bandwagon, now’s a good time to start.
2. Low housing prices. This isn’t “new” news by any means, but it’s an important part of the equation (which equals ‘perfect time to buy a home’). Housing values have fallen steadily over the past two years and in turn, so have their sale prices.
3. Low down payments are available on FHA loans. FHA Loans are safe, government-backed loans that will let you purchase a home with 3.5% down. Let’s consider this: If you’re buying a $200,000 home, your down payment (not including closing costs, taxes, etc.) is only around $7,000. That’s a goal that doesn’t seem quite as far out of reach.
Lower Interest Rates equals More Buying Power
A borrower with a lower interest rate has a few options. One, the borrower has more buying power because due to the lower rate, you will have lower monthly mortgage payments. This will allow the borrower to use the extra money to buy a more expensive home. Having lower monthly payments can also free up more money to live a more comfortable life.
When a borrower has a lower interest rate, the amount of money they can save on interest rates is in the tens of thousands. The borrower will pay less interest over time, first because the bank is charging a lower rate with the current mortgage interest rates. Second, the borrower can take the money saved every month and apply it towards the principle. This will make the loan pay off much quicker and you will pay even less interest to the bank.
When you put more money in your pocket it will increase your buying power.
With these things working together to your advantage, this is the best time to buy a home in decades and you probably won’t see these homebuyer benefits ever again.