Current Mortgage Interest Rates - July 2020
/Dan Hubrich of Mountain View Mortgage is taking about the current low interest rates for mortgages and what that means for qualifying for loans and monthly payment amounts.
This month I’d like to talk about how lower interest rates affect your buying power. Covid-19 is no fun for any of us BUT the silver lining is that interest rates are the lowest they’ve ever been. Generally speaking, bad news in the world is good news for interest rates. The Fed intentionally will drop rates when there is crisis going on because it accomplishes a few things. Some of the big ones are: 1) It provides a layer of safety and stability. With lower rates, businesses can borrow easier to grow which means more jobs. 2) It also directly stimulates the economy on a personal level. If the average consumer can put a couple hundred extra bucks in their pocket each month, what do you think they are going to do with that money? MOST of them will spend it…which helps stimulate the economy and keep everything moving upward.
So, with that being said, how good are things right now? The answer is they are VERY good! Buying power has increased significantly in just the past several months. On a $400,000 home the difference between a 2.9% rate and a 3.9% rate is $222/month! Or put another way….if you qualified for a $400,000 home last year based on a rate of 3.9%, right now at a rate of 2.9% you’d qualify for $452,000!! That makes a huge difference in what kind of home you could get into. So honestly there has never been a better time to buy your first home, upgrade to a nicer home, refinance, pull cash out, consolidate debts, etc. than right now. Please contact us for more info and see how you can take advantage of this unique situation that we are in right now.