Both homeowners and homebuyers are rushing to buy a new house or refinance their current loan because of the combination of record-low mortgage rates and strong economic growth. One expert recommends that both groups act quickly because higher rates are on the horizon for the real estate market.
Jeff Taylor, Mphasis Digital Risk managing director, said mortgage rates have been rising and will probably continue that way for the foreseeable future. While I don't expect them to rise radically, they will stay in the 3% range, which is still significantly lower than a few years ago. The bond market, which sets the tone for rates, is reacting to higher consumer inflation data, as the CPI rose to the highest level in 30 years. If you are considering refinancing your mortgage, you can save money on your monthly payments by taking advantage of low rates. It's possible to find your personalized interest rate and see how much you could save when you visit Credible.
SAYS NAR
Here's why homebuyers and homeowners should act now - here's why.
Taylor predicts that home prices will increase from 5% to 13% in 2022, with the highest gains occurring in the Southeastern U.S. Taylor says that now is a good time to buy a home or refinance home loans while interest rates are low.
He said that you should make sure your loan pre-approval is as solid as possible. A conditional approval on the loan will be issued if you push your lender for granular pre-approval that includes all of your actual documentation that you submitted or actually has the lender s underwriter review. You can compete with cash offers with this type of pre-approval. The average 30-year mortgage rate is just above 3% APR, while a 15 year mortgage is at 2.42%, according to Freddie Mac. If you are considering buying a home or want to refinance in order to save money on your monthly mortgage payment, visit Credible to compare multiple mortgage lenders and choose the one with the best interest rate.
Many members of the Federal Reserve believe that the Central Bank will raise the federal funds rate, but Taylor doesn't believe that will be the next rate hike until 2023. He said that the housing market will remain strong regardless of the Fed monetary policy.
Even if they raise earlier, it won't affect demand in the purchase housing market due to the fact that there are still four million borrowers looking to purchase homes, Taylor said. Renting is not a great option for those who want to build equity and buy a home, because rental prices have been rising along with the purchase market. The refinance market, which is already declining, is the only thing that will be affected by raising rates. If you have higher mortgage rates and want to refinance your home loan and lower your monthly payment before rates increase, contact Credible and get all of your questions answered.
Email The Credible Money Expert at Money Expert.com and ask a question that could be answered by Credible in our Money Expert column.