Nick Seidell is sharing an update on what’s going on in the mortgage world.
Over the past three months, we’ve seen some crazy economic changes and social unrest. It’s been a tough time for all of us, and my heart goes out to you all.
That said, there are some positive notes to point out. If you’re looking to purchase a home or refinance your current one, interest rates are currently very low due to the pandemic’s impact on the stock market and the Fed trying to prop up the economy through buying unprecedented amounts of mortgage-backed securities. The yields on those securities have risen because the Fed has artificially created demand.
In the process of pricing out FHA loans, I found that a person with a 661 credit score could qualify for a $250,000 loan with a 3.5% interest rate. Someone with a 680 credit score could get a 2.87% rate on a 30-year fixed loan.
If you’re looking to buy or sell a home, now is a great time.
Rate term refinances, which means you’re trying to better your rates or terms, for those who aren’t furloughed due to the pandemic could make a lot of sense. People who qualified for loans last year between 3.8% and 4% could get a lower rate by refinancing. That could create huge monthly savings on principal and interest. Over five years, staying with a 30-year fixed and doing a rate-term refinance could save you tens of thousands of dollars.
If you’re looking to buy or sell a home, now is a great time. There’s a bit less demand, but we’ve seen a big uptick in the number of people buying and selling a home due to the appeal of locking in those low interest rates.
If you have any questions about the housing market or financing a home purchase, don’t hesitate to reach out to us. We’d love to hear from you.