Experts anticipated interest rates would increase this year. These rising rates would have had the potential to make buyers nervous about whether it's the right time to purchase a home. But the reality is that increases have been modest so far in 2019, and interest rates have stayed relatively low, making now a great time to buy or refinance a home.
Let Honor Bank show you how interest rates impact your potential home purchase and give you four reasons why now is a great time to buy the home of your dreams!
How Do Interest Rates Affect My Mortgage?
As interest rates fluctuate, it impacts homebuyers in a big way. At the beginning, most of your mortgage payment will go toward interest. This means higher interest rates lead to a higher long-term cost of owning a house.
Four Reasons to Buy a Home Right Now, with 30 Year Fixed Rates Below 5%
With today’s reasonable interest rates, buying a home is a smart investment, especially when compared to renting.
Check out these four reasons why it’s a good time to buy a home now:
- Interest Rates Are Still Historically Low. When looking at the big picture, interest rates are still historically low. Mortgage interest rates were upwards of 19 percent in 1980 and did not drop to under four percent until 2011. Many factors affect the interest rate a home buyer will qualify for; however, most current 30-year fixed interest rates are still under 5 percent. Shorter terms can carry even lower fixed rates. That helps put things in perspective. Visit the Honor Bank website to view current mortgage rates.
- Locking in Your Mortgage Rate. The sooner you start your home purchasing process, the sooner you can lock in your mortgage rate, protecting you from increases. Mortgage rate locks can last for up to 60 days, if your mortgage is closed on a specific date.
- Rates Are Still Likely to Rise. If you’re on the fence, acting sooner rather than later could be beneficial. Mortgage interest rate increases are inevitable – it’s a matter of time before they rise. What will rates be like in 2020 or 2021? Waiting is not always the best strategy. In addition to rate increase concerns, buyer competition and home prices are also increasing.
- Refinancing Is an Option. If you already own a home, you’re not stuck with your current interest rate! By refinancing, you can get a better interest term and rate. Your mortgage interest rates do not have to be set in stone forever. If interest rates fall below your current rate over the course of your mortgage term, there is flexibility.
Let Honor Bank Help Your Home Buying Process
Honor Bank is prepared to help you on your home buying journey. If you’re ready to take the first step, contact our trusted local team today! Call 877.325.8031 or submit the form on our Contact Us page to get started.