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Wednesday, September 28, 2022
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HomeReal EstateHow You Can Take Advantage of Lower Interest Rates

How You Can Take Advantage of Lower Interest Rates

The trade war in China is providing some opportunities for homebuyers and homeowners in 85209.

Wall Street showed anxiety this summer over trade tensions and a slowing in growth, and as a result, long term bond yields dropped.

Homeowners with higher rates than they’d prefer are taking advantage of opportunities to make their current home more affordable.

“It’s an opportunity to utilize some of the potential equity in your home,” said Steve Farrington, a finance expert with loanDepot who specializes in the East Valley. “Due to steady and sustainable appreciation of values in Arizona, it’s a great time to remove costly PMI, consolidate high interest credit debt or liens, or to invest in another home.”

While rates have dropped due to Wall Street tensions, the local economy is booming. Arizona has the fourth-fastest growing state economy in the United States, and is in the top 10% in job growth. With an increasing number of high-tech companies investing in East Mesa, local job growth is expected to continue.

Homebuyers and homeowners seeking to refinance are finding lower rates than experts had predicted for 2019.
“The rates we’re seeing today are at the lowest levels since the fourth quarter of 2017,” said Farrington. “These are levels the experts told us we’d never see again.”

For homeowners, rates spell lower payments and lower cost of interest over the life of the loan.

For home buyers, rates can make a significant impact on home affordability. A difference between 4% and 5% for a home buyer purchasing a home with a $300,000 price (5% down payment financing $285,000 on a 30 year fixed conventional loan,) the payment difference is over $160 less per month at 4% than at 5%.

Lower rates can also help buyers increase their “purchasing power” by allowing them to afford a little more home than they may have at previously higher interest rates. As of August 14, according to the Mortgage Bankers Association, the average 30 year fixed loan is .875% lower than this time just one year ago.

“The past few years in the mortgage rate environment have created a great opportunity for home buyers and homeowners to buy, sell, and refinance the American Dream and build wealth while improving their family’s lifestyle,” said Farrington. “I truly enjoy offering guidance and assistance to help others achieve their personal and financial goals.”

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