Photo Attributed: shortsalesapproved.com
With the British exiting the European Union earlier this summer and slow job growth, the Federal Reserve has postponed the possibility of adjusting key funds. It is still unclear what the Fed may do within the next couple of months, but economists are suggesting that people who want to take advantage of the low mortgage rate do so now.
Consumer interest has remained relatively low throughout the summer and since the Brexit, the Fed’s have not raised interest rates. Right now, the average mortgage rate for a 30-year mortgage is at its lowest it has ever been, below three and a half percent. This is about half a percent less than at the end of 2015 when it was announced that the Fed would be raising interest rates. The summers of 2013, 2014, and 2015 all experienced rates above four percent. Today’s low rates mean that buyers have a six percent more buying power than they did in the summer of 2015. According to experts, rates are expected to remain low for now, but may rise by next year. As a result, this summer is the time to obtain or refinance a mortgage so you can take advantage of the low rates.
Those with Adjustable Rate Mortgages really should take advantage and consider refinancing to a fixed-rate mortgage. Adjustable Rate Mortgages allow your mortgage payments to fluctuate after a certain period of time, typically five to seven years. Homeowners with ARMs whose fixed rate period has ended should see their own rates increase whenever the Fed decides on a hike. Because of today’s low rates and the possibility of a hike in the near future, homeowners should refinance into a more long-term mortgage package.
The nation’s housing market is in favor of buyers and refinancers at the moment. With low rates does come lenders being stricter. With this in mind, it is important to make sure you have your financials in order and credit report. Although it can take some time to correct your credit score, do what you can to decrease your debt-to-income ratio because the future of the economy is always uncertain. Ultimately it is up to you if you think you should act now or wait, but interest rates have remained low for some time and they may not last much longer.
At B Squared Funding we are here to help you with the purchase of your next dream home, investment property, or secure a super low rate. For personalized service call us 562. 508. 4004 and let B Squared Funding give you your #ClosingSmile.