You read that right, interest rates have dropped to their lowest level of 2014 and are below 4% right now, thanks in part to Ebola. With the second case of Ebola in Dallas, ISIS, a weak European economy and other problems around the world, investors are pulling their money from the stock market and putting it into the bond market. When the purchase of bonds increase, the bond yield decreases and as a result, so do mortgage interest rates.
I've spoken with a lender today who has seen rates drop as much as .75% today which is unheard of. I never thought we would see rates fall below 4% again and yet they have. Do the experts think this will last? No, the US economy is still very strong and it is only a matter of time before money gets put back into the Stock Market. The Federal Reserve is also set to begin qualitative easing, ending their long run practice of buying bonds to keep the interest rates low whichwill cause rates to rise again.
If you have a property under contract, today is definitely the time to lock in your rate if you haven't done so yet. If you never refinanced your property when rates were in the 3's, now is the time to do so. If you have a rate in the upper 4's or higher, it is definitely worth speaking with a lender today. If you are on the fence about buying, or are looking and haven't found the right one yet, now is the time to reconsider your finances and see if these lower rates open up more houses to you.
A rate .75% lower would save your roughly $150 a month on a $300,000 home. That's $1,800 a year, more than a mortgage payment, and $9,000 over five years, the average length of time you will be in a home. These are serious savings and not to be ignored. If you want to speak with a great lender about your options, please let me know and I can put you in touch before the market corrects itself and these rates are gone forever.
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