Mortgage Interest Rates are certainly lower than they have been in a long time. I think it’s pretty important to compare your own situation to investigate if it makes sense to take advantage of these historic lows for mortgage interest rates.
Mortgage Interest Rates
Low Mortgage Interest Rates
Compared to almost any point in history, mortgage rates are lower than they have ever been. This should not be the only consideration in buying a home, but it is certainly important to save money wherever possible. These mortgage interest rates are low enough to save potentially thousands of dollars. There are many avenues to explore when trying to get lower mortgage interest rates, so keep your eyes open to those opportunities.
First off: just try to ask your bank! This seems obvious, but your bank has a vested interest in keeping your business, and given that you could simply take your business to another bank if you wanted to try to get lower mortgage interest rates, it is pretty logical that they would want to keep your business by offering you a lower mortgage interest rate, without forcing you to leave! They are not going to seek YOU out to just give you a lower interest rate, you need to ask them! And since you’ve been paying off your home mortgage for quite some time, you have a lot more leverage when you approach them with this request: you have a good mortgage payment history with them, which helps improve your credit score, which means you can likely negotiate for a better rate based on your own dealings with them. Furthermore, you have equity in your home by this point! This means that when you are negotiating for a lower mortgage interest rate, you have even more leverage than when you tried to get the mortgage to begin with!
You should use all those options to your advantage when negotiating for a lower rate, and also compare several other lenders (local as well as online). If you are paying 6, 7, or even 8 percent on your current home mortgage interest rate, it is absolutely worth considering investigating the many different options at your disposal! You need to keep an open mind and do everything in your power to keep money in your pocket! Better yet, use this extra savings to pay off extra bills that have higher rates than your home mortgage rate, and THEN you can pay off your mortgage even sooner! With todays economy, you need to save as much money as possible, minimize your expenses, and ensure that you are controlling your own situation enough that you can eliminate the extra expenses that a 2 or 3 percent higher than needed interest rate would bring.
Furthermore, should you really delay any longer than you already have before choosing to investigate a lower mortgage interest rate? Well, not really… It’s difficult to say where the mortgage interest rates will “bottom out” at, but they can’t fall too much lower without seriously hurting everyone involved, banks included. New home purchases are very slowly starting to stabilize, and many of the hardest hit areas are starting to recover (although, not all have recovered yet), but for our economy’s sake we hope they will. This is probably one of the hottest “buyer’s markets” we have ever been presented with, and currently there is sort of a “perfect storm” for the new home buyer. Mortgage interest rates are absolutely low, MIGHT go lower, but nobody knows for certain! I would rather lose an unknown .1 or .2% longterm, than risk going UP another .1 or .2%, when things are uncertain, it’s certain to go with what’s already known about interest rates, instead of speculating on the unknown. Would I be upset if average mortgage interest rates dipped another .5%? Sure I would! In fact, they already have since I bought my own home a few years ago!
But you cannot ignore the fact that home values have also tanked and are lower than they have ever been before. Now, I can’t make financial decisions for you, but what made the most sense to me was realizing that (at the time that I bought), the market was already IN a down-swing, all-around. NOT in an up-swing when all the investors were buying, inflating the market, and causing the whole kit to tank! What made sense to ME at the time, was realizing that mortgage interest rates, as well as home costs overall were unlikely to get TOO much lower, and even though they MIGHT go lower, it made sense to jump on it and buy a home that was within my budget, and save the money that I can, when I can! I ended up with great mortgage rates by taking advantage of the opportunity at the time where potential reward wouldn’t out-weight the risk if I waited and mortgage rates DID start to increase! Then I would not be able to afford a new home at all!
Be smart, work within your budget, and look for opportunities to save money where you can. Things will get better, and if you want in, you need to GET IN while mortgage interest rates are GREAT, even if they might get a little better in the short-term, these downward-trending mortgage interest rates might not last for long! Combine that with cheaper-than-ever housing, and I couldn’t afford NOT to jump in when I did!
