If you are curious how the Federal Reserve impacts mortgage rates and why some of your friends are rushing to refinance their homes, you are not alone.
The Federal Reserve rate serves as the benchmark for how much it’ll cost you to borrow and how much you’ll be paid to save. When the Fed made the decision to stimulate the economy and slash rates to near-zero during their emergency meeting back in the spring of 2020, the cost of borrowing money became more affordable. And since the borrowing costs are indirectly connected to mortgage rates, we have since witnessed mortgage rates trending down to record lows last seen back in 2012.
What does this mean for homebuyers?
As stated by Jonathan Corr, president and CEO of Ellie Mae, “As interest rates drop, savvy borrowers are quick to take advantage.” As data indicates, many have already leveraged this great window of opportunity with refinance applications significantly higher today than they were a year ago and home purchase applications rising for the sixth straight week. And while you can’t expect for your mortgage rate to hit zero like the benchmark rate, it’s still the best we’ve seen in over a decade.
Now, more than ever, you may be looking for ways to stretch your budget or improve your family’s financial future. Allow me to analyze your existing mortgage terms to determine if you might be able to lower your monthly payment. And, if you feel it’s time to move, this is a perfect season to be in the market and leverage your purchase power to find your dream home while saving interest at the same time!
Call today for more information.