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Good News for potential home owners!! Today, mortgage rates dropped below 6 percent for 30 year fixed-rate, conforming mortgages, after the Feds announced that they would buy up to $500 billion of securitized home loans. Many brokers and bankers reported rates falling as far as 5.25% for a while.
Bob Walters, chief economist for Quicken Loans said “This is going to have a major effect on refinancing opportunities and it should absolutely translate into increased home buying.”
A hypothetical example of a house that has lost $175,000 in value over the last couple of years. In 2006, a borrower would need a $500,000 mortgage to buy the house; today, a borrower would need $325,000.
The average rate on a 30-year fixed was about 6.5 percent two years ago. At 6.5%, the principal and interest on a $500,000.00 was $3,160 a month. Now, if someone borrowed $325,000 at 5.5% percent, the monthly principal and interest would be only $1,845.
The Fed’s action will not only help home buyers, but also homeowners with adjustable-rate mortgages who want to refinance into fixed-rate loans.
With an abundant inventory of homes, combined with current low rates, it’s a great time to purchase a home!
If you are intersted in buying a home, or need advice, please feel free to call Amy Underwood at 972-921-8787. Please visit our site: www.NorthTexasHomeFinders.com. Put “Amy” in the “How Did You Hear About Us.” As always, a buyer’s agent works for you at no charge, so why not call us today!!!
