Mortgage rates are always in the news and people always ask me “why should I care about rates rising or falling?”  So taking advantage of today’s news, I thought I’d do a brief summary on the matter. (I gave a similar explanation in my March 2020 blog).

1.  When mortgage rates drop, it means that if you were to refinance your existing mortgage, your monthly payment would also go down.  By how much depends on your current interest rate versus the new interest rate.

2.  When mortgage rates drop, would-be buyers can now afford to buy more, as the mortgage balance that they will get approved for goes up.  This brings more buyers to the market, and causes home prices to increase, if inventory is low.

3.  When mortgage rates go up, it means a loan is more expensive on a monthly basis.  

4.  If you are happy with your current mortgage rate, then the news is not important to you personally, but most of us know someone that would benefit from either refinancing or buying when rates are low…so share the news.

5.  If you are in the market for an investment property, you want to be able to borrow and buy when mortgage rates are low.  

The bottom line is that lower mortgage rates are supposed to help more renters become buyers.  However, the current low inventory client isn’t helping that goal.

If you want to read that full article:  Click Here for CNET article

Source:  CNET (December 8th, 2021)

#mortgagerates #realestate