Chances are you’ve heard that mortgage rates have dropped dramatically, and you may be wondering if now is the right time to buy or refinance. Ultimately, making that determination will depend on your individual situation, but there are some compelling reasons why buying or refinancing might be worth considering.
Why It’s a Good Time to Buy
Low Interest Rates
Numerous factors impact your monthly mortgage payment, including the home price, loan term, down payment, and interest rate. Right now, interest rates are near an all-time low, which is good news for you as a potential homebuyer. While your interest rate will vary based on your individual financial background and credit history, you can expect it to be lower now than it has been for many years.
Save Money vs. Renting
More often than not, prospective buyers find that homeownership will end up costing less than renting – especially in the current market due to low interest rates. In fact, the money you can save over time by purchasing rather than renting can offset your upfront homeownership costs and allow you to build equity in your home.
With low interest rates comes an influx of homebuyers, which means that homes are flying off the market faster than ever. Low inventory tends to lead to a rise in home prices, which we’re seeing right now. If you want to take advantage of low interest rates, now is the time to buy, as prices are steadily rising. According to the latest data from the Mortgage Bankers Association, home prices are on track to rise an average of 4% year over year.
Making the Case for Refinancing
Already own a home? There’s still good reason to pay attention to low interest rates! Now may be the right time for you to consider refinancing your existing mortgage. With rates near historic lows, you’ll most likely find that opting to refinance now will pay off significantly over the life of your mortgage. A recent report by Fannie Mae states they estimate that nearly 60 percent of homeowners with mortgages could potentially reduce their interest rate by at least a half-percentage point by refinancing. Even a seemingly small change like this can have a big impact on your overall mortgage cost.
Why Should You Consider Refinancing
Low interest rates are one of the biggest drivers of refinancing, but there are other good reasons to consider, including:
- Paying off your loan more quickly with a shorter term, such as moving from a 30-year to a 15-year fixed mortgage
- Extracting home equity with a cash-out refinance to pay down debt or fund home improvement projects
- Having enough equity in your home to no longer need mortgage insurance
As you can see, the perks of refinancing are plenty, and now is a great time to take the leap due to low interest rates.
Whether you’re considering buying a new house or thinking about refinancing your current one, C&F Mortgage is focused on you and your mortgage needs. Get in touch with a C&F Mortgage local industry expert today to see if now is the right time for you to buy or refinance!