Updated March 12, 2020:
Mortgage applications have reached their highest level since 2009, following the record drop in rates last week.
Many homebuyers and homeowners have rushed to take advantage of these historic rates.
Refinances led the majority of this action, making up nearly 77% of total applications nationwide and representing a 66.2% increase from just a week ago, according to the Mortgage Bankers Association.
Mortgage rates in the US have fallen to an all time low, opening up significant potential for buyers, homeowners, and Realtors® to act now.
Rates tumbled over the past week to 3.29% – the lowest point on record, according to Freddie Mac, which has tracked rates since 1971.
For comparison, at this point last year, rates on 30-year mortgages were at 4.41% roughly 34% higher than they are today.
How this Benefits Home Buyers
For agents that have clients on the fence about buying a home, this is the perfect opportunity to get them to “make the move.”
As we discussed over the summer when rates initially started dropping, homebuyers just need educated on the impact this has on their buying power.
From a homebuyer’s perspective, the lower the mortgage rate, the more house one can afford from a monthly payment standpoint. They could theoretically buy a more expensive home and have the same monthly payment as a cheaper home that had a higher rate.
Or, they could buy the cheaper home and have a cheaper monthly payment.
That’s the impact this has, and that’s why now may be the best time, in history, to buy a home.
How this Benefits Current Homeowners
For current homeowners, especially those who’ve purchased a home when rates weren’t as favorable, there may be no better opportunity than now to pocket major savings with refinancing. By refinancing, a homeowner could lower their current interest rate, resulting in a monthly reduction in costs, and subsequently thousands of dollars in savings over the life of the mortgage. Also, depending on the type of loan, refinancing could significantly shorten the length of the mortgage.
Either way, prospective or current clients of yours can benefit from this.
Does refinancing make sense? How will this affect their monthly payments or buying power? At AmeriFirst Home Mortgage, our experienced loan officers can help answer those questions and more. Our team of mortgage originators has the knowledge and experience to give your clients the best options to suit their needs.
Call or click today to learn more.
Yale, Aly J. “Mortgage Rates Dip To Lowest Point On Record.” Forbes, Forbes Magazine, 5 Mar. 2020, www.forbes com/sites/alyyale/2020/03/05/mortgage-rates-dip-to-lowest-point-on-record/#4318e4e86fc8.