Coronavirus Vs. The Mortgage Industry: Should you buy now or wait?
As you continue to get daily updates on how Coronavirus is affecting the mortgage industry, it may seem like buying a home at this time is not ideal. Before you call off your home purchase, it is important to do research to make an informed decision. Here are a few updates on the mortgage industry and interest rates as the situation with the Coronavirus continues to evolve. We hope this helps you determine if a home purchase should be in your near future.
What is going on with interest rates?
You’ve probably seen the headlines that the Fed lowered rates to 0%. What they actually lowered was the Fed Funds Rate, which is the rate that banks charge each other to lend reserve funds on an overnight basis. So, it is an indirect component of mortgage interest rates, but it doesn’t mean that mortgage rates are 0%. The most significant part of the Fed’s announcement is that it committed to putting $200 Billion into the mortgage-backed securities market, and this is really what will help interest rates.
How does this affect homebuyers?
Interest rates are going to continue to be very volatile. That means they may change very quickly, and you may see them change by a good amount on a day to day basis. However, whether rates go slightly up or slightly down, it’s still creating a tremendous opportunity for you to lock in cheap money for the long term.
- Own a home and have credit card debt, consolidating from the average credit card interest rate in the high teens to a lower mortgage rate can be life-changing!
- Are renting a home but would like to build equity and position yourself for long term financial success, you can afford more home right now than at any time in the past decade!
- Are currently working with a loan officer and are wondering if you should lock in the rate or try to wait to get a better rate, it might be best for you to play it safe and lock in a rate you will be happy with 2, 5, 10-years from now.
It may be time for you to really weigh your options to refinance or purchase a home. A smart decision now could save you thousands of dollars in the long run.
Christensen Financial has been around for nearly two decades. We survived the Financial Crisis and we thrived in the years after it. We want to be a reliable resource for our community. Please reach out if you have questions about the state of mortgage interest rates.
With everything changing so quickly, some things you read from last week may not even be applicable today. So, contact a CFI Mortgage Specialist for the most up-to-date information. You can rely on our team and our resources!