Why Now is the Best Time to Buy: Today’s Mortgage & Refinance Rates
We all know that the market is scorching hot right now, but it’s a double-ended delight for both sellers and buyers with record-low mortgage and refinance rates incentivizing new deals. Money.Com reported that borrowers with credit scores in the 700s could secure an average rate of 3.529% for a 30-year fixed-rate purchase mortgage. The results were part of a survey that takes into account more than 8,000 lenders across the United States.
Additionally, the survey found the national average for a 30-year refinance is 4.573%.
Your Credit Score & Mortgage Rate
So how exactly does your credit score impact your mortgage rate? The survey found that borrowers with a credit score of 740+, typically described as borrowers with the “best” credit scores, were quoted rates averaging 3.114%.
Those with a more average, or lower credit score of 640 or below, were given rates of 4.896%, equating to a 1.782% difference.
Experts do suggest shopping your quote though and hunting for a better rate. If you have other current accounts in good standing with a lender, you should check with them first. A positive history will give you leeway to negotiate a sweeter deal. Additionally, some banks are advertising higher rates to prevent a borrowing frenzy, so be sure to double check rates personally.
The survey is based on borrowers putting 20% down, and includes mortgage points.
Refinancing Your Home Today
Money.com’s survey also found that the best rate for a 30-year refinance (740+ credit score) is 3.763%. Comparatively, last August’s mortgage rate (including fees) was 4.005%.
What does this mean for the average homeowner? Well, if you purchased your home for $200,000 at a mortgage rate of 4.005%, and now wanted to refinance your home, you could cut your monthly mortgage payment from $1,013 to $928 with today’s lower rates.
To find out if now is a good time to refinance your home, consult with a lender. Additionally, be sure to account for closing fees you paid on your home, how much your new lender is charging and how long you have left on your mortgage.
Thinking About Selling Your Home? Here’s Some News from the Market
New Homes Are Selling Fast
“The shortage of both new and existing homes is intensifying across America right now as record-low mortgage rates drive more demand, but the shortage of new homes is less severe due to a surge in construction right before the pandemic,” says Sheharyar Bokhari, senior economist for Redfin. “As a result, sales of new homes are growing faster than sales of existing homes.”
According to the U.S. Census Bureau, sales of new single-family homes increased by 13.9% over June numbers. This represents a huge increase in sales, with a seasonally adjusted annual rate of 901,000 compared to a rate of 791,000 in June. Last year, new homes were selling at a much lower annual rate of 661,000. Additionally the median cost of newly-built homes is increasing from $330,660 in July to $391,300 in August.
COVID-19 is Impacting the Mortgage Industry
A slight decrease in mortgage forbearance was reported on August 16 as more homeowners are exiting the deferral programs, according to the Mortgage Bankers Association. An estimated 7.20% of all mortgage loans are in forbearance, down on point from last week.
Expecting More Sales in the Fourth Quarter
Experts are planning for more sales in the final quarter of 2020. Ruben Gonzalez, chief economist for Keller Williams reports: “We may see strong sales in the fourth quarter contingent on the surge in coronavirus cases being contained. The two key factors in place during the low in coronavirus cases were a strong stimulus in demand due to low mortgage rates and a serious pullback in supply due to social distancing and the shortages that existed previous to the pandemic.
Ready to Purchase a New Home?
Mortgage Rates Update with Brandy and Meagan
With record low mortgage rates and an increase in sales, now may be the most opportune time to seriously consider a new home. When you are ready to begin your search or to test the market, The Coffey Group can assist you with the most market-knowledgeable insights and experience in the local Gulf Coast market.
For more information, or to get started, contact us today!