Interest Rates: Now Is The Time To Buy Or Refinance

If you’ve been thinking about buying a home or refinancing your current mortgage, but have been putting it off, here’s a very simple question for you:

What are you waiting for?

With the interest rates currently at an all-time low, the time is now to buy or refinance.

According to the weekly Freddie Mac survey of mortgage lenders, the current interest rate on a 30-year fixed-rate mortgage is just above the 5.0 percent mark—and this current rate is the lowest it’s been since Freddie Mac began surveying lenders way back in 1971. In terms of a low interest rate, you really couldn’t ask for much more. A recent CNN/Money.com headline says it all: “Mortgage Rates Hit Fresh 37-Year Low.”

So, once again, what are you waiting for?

After a period of volatility in the middle of 2008 when the rates peaked at just over 6.6 percent, interest rates began a quick descent as the year drew to a close. This rate drop was mainly spurred by the Federal Reserve’s announcement in November that it was going to buy upwards of $500 billion worth of mortgage-backed securities from both Freddie Mac and Fannie Mae. Since then, interest rates have been falling—and falling quite dramatically.

There is speculation that interest rates will go even lower in the near future, but don’t hold your breath waiting for that to happen. Most experts believe that interest rates are much more likely to go up in the near future rather than continue to break records. Waiting for rates to drop another 1/4 or 1/8 of a point is too much of a risk, experts say. If we’re seeing record-low interest rates today, why take a chance on tomorrow’s rates? Just as quickly as rates went down, rates could quickly go back up—possibly into the 6 percent range again.

Of course, your ability to buy or refinance and get a great interest rate will depend on several other factors such as your credit score, amount of home equity you’ve built up, and/or your current loan-to-value ratio. Your best bet is to get in touch with your mortgage professional to see what kind of interest rate you can get. ∆