Looking At Seattle Homes For Sale, Interest rates, and Affordability – Should You Buy Now? Or Wait?
The fact is that interest rates on 30-year, 20-year and 15-year fixed rate mortgages are some of the lowest in history. We don’t know how they will increase over the next two years.
In discussions with friends about their plans to purchase a home I often hear them say that they would like to purchase in a year or two. This is great news for everyone. However, I usually try to educate them on the current advantages of low mortgage interest rates. – Cooper Jacobs Real Estate
Taking advantage of a 4% or lower loan rate can save prospective homebuyers thousands, if not over $100,000 in the amount of interest paid on the life of a loan.[1] Currently, interest rates on a 30-year fixed loan are setting at 4.02%. That is the lowest since June 2013.[2] With the economy on track for a solid 3.5% annual growth and inflation rising, investors are beginning to dump bonds for stocks.[3] This, in turn forces financial institutions to raise the interest rates on loan products to keep a profit.
The economy is no doubt on an upward trajectory. Baring another economic disaster, the economy will continually improve and force interest rates up. Can we predict whether interest rates will be significantly higher in 2016? The answer is no. However, we can say with confidence that they will be higher and when it comes to your money every dollar matters.
Current homeowners are taking advantage of these low interest rates by refinancing. They understand the significant savings to be had by leaving their 30-year fixed rate mortgage for a new 20-year or 15-year fixed loan instead. In fact, 44% of people who refinanced in the third quarter “ditched their existing 30-year fixed rate loan in favor of a shorter-termed 15-year or 20-year loan. It’s the second quickest exodus from the 30-year fixed rate mortgage in recorded history…”[4]
So, instead of putting off the home buying process for another year or more, people should begin to get their feet wet.
- Build a relationship with a local Seattle Realtor
- Ask your Realtor for their trusted resources such as a referral for a lender.
- Find out what kind of loan options you can qualify for and what is available.
By taking advantage of these resources you can be prepared to pull the trigger when you find a home that you love. It should also be noted that using a Realtor that is from your neighborhood is a service that will cost you, as a potential home buyer, nothing out of pocket. So, let a professional help you do the searching and narrow down the choices for you. In the end, it is all about making things smooth and easy while saving money.
[1] Lisa Ward, “The Steep Cost of Not Refinancing,” The Wall Street Journal, November 9, 2014.
[2] Average 30 Year Fixed Mortgage rates, http://www.mortgagenewsdaily.com/data/30-year-mortgage-rates.aspx
[3] The Detroit News, “U.S. 30-Year Mortgage Rate up to 4.02%,” http://www.detroitnews.com/story/business/personal-finance/2014/11/10/mortgage-rates-rise/18779027/
[4] Dan Green, Today’s Low Mortgage Rates Push Borrowers Away From 30- Year Loans, http://themortgagereports.com/16858/freddie-mac-refinance-report-transition-15-year-30-year-mortgage-loan
Cooper Jacobs Real Estate 206-236-9696
