In today’s real estate market, mortgage interest rates are near record lows. Northern Michigan banks have been offering mortgages, refinancing options, and new construction loans at eye-popping rates reaching below 3% for some borrowers. Though none of us have a crystal ball, it’s safe to say that these rates won’t remain this low forever.
Whether you’re a buyer or a seller or just evaluating your options, here are three things you should consider doing before rates change.
- Sell and Move Up (or Downsize)
Many of today’s homeowners are rethinking what they need in a home and redefining what their dream home means. For some, continued remote work is bringing about the need for additional space. For others, moving to a lower cost-of-living area or downsizing may be great options. If you’re considering either of these, there may not be a better time to move. Here’s why.
The chart below shows average mortgage rates by decade compared to where they are today:
With rates at historic lows and home values at historic highs, homeowners have a perhaps-once-in-a-lifetime opportunity to cash out at the top for their existing home and get maximum buying power with a powerfully low interest rate for a new one.
It’s true, high home values do mean inflated home prices, but buyers who are willing to consider different options and can be patient in the process have a chance to really cash in.
- Purchase Your First Home
If you’ve never purchased a home before, this might seem like an intimidating time to get into the game, but if you’re like most first-time home buyers and your monthly payment is very important to you, you shouldn’t let this opportunity slip. Here’s why:
The difference between current mortgage rates and rates we expect to see in a year or two from now could mean the difference of hundreds of dollars every month, and over the course of your entire loan, this will add up significantly.
- Refinance Your Existing Mortgage
If making a move right now still doesn’t feel right to you, mortgage refinancing is something you should consider.
Even though mortgage refinancing does come with some upfront costs, based on the current rates, well-qualified applicants can trim hundreds of dollars off their monthly mortgage obligation, making the breakeven-point for a refinancing investment a year or sometimes even less.
If you’ve got mortgage or mortgage refinancing questions, reach out to our friend Jeremy Kilbourne at Arch Mortgage. He’s got a ton of great options for purchases or refinancing and can help with all your financing needs.
Bringing it All Together
It feels like we say this just about every week, but this is, without a doubt, an unprecedented time in real estate. There are new exciting opportunities, challenges, and puzzles to solve, and the Brick & Corbett Team is ready to help you through any and all of them.
Reach out today to see what we can do for you. Your family’s home is our family’s business.