Mortgage Interest Rates Are Slow – How to take advantage if you are buyer/seller

If you’ve been following the news recently, you’ve likely heard that mortgage interest rates are at historic lows. Fortunately for buyers and sellers, it is true. Current mortgage rates are at record lows. However, read on below to find out just how low they are, how long these interest rates will be around, and what you can do to take advantage of them while they last.

What are mortgage interest rates currently?

If you’ve heard about low-interest rates, you’ve heard right. Following a series of rate cuts in 2020 as a response to the coronavirus pandemic, the Federal Reserve dropped interest rates to their lowest point since Freddie Mac began tracking the data in the early 1970s. 

As it stands, rates are still hovering close to record levels. According to Freddie Mac, at the time of writing, the average interest rate on a 30-year, fixed-rate loan is just 2.67%. that number is down over a full percentage point from what it was at the same time last year. 

Are mortgage interest rates expected to rise in the near future?

Yet, as most of us know, interest rates won’t stay this way forever. Right now, many worried that with a vaccine on the horizon, record low-interest rates will soon be coming to an end. however, on the part of the Federal Reserve, that doesn’t seem to be in the plan anytime soon. 

Earlier this fall, the Fed released quarterly economic projections that signaled that interest rates would remain low through 2023. Then, in the more recent statement, they echoed those same sentiments, remarking that they intend to keep the federal funds rate near zero until such time that inflation remains well-anchored above 2%.

With statements like those coming straight from the source, it’s hard to believe that we’ll see anything other than low-interest rates for the next couple of years. In the end, only time will tell how long these rates will last, but it’s fairly safe to say that they aren’t going anywhere anytime soon. 

How to take advantage of low-interest rates as a buyer

Now that you know but today’s interest rates are here to stay, it’s essential to take a look at the ways in which you can take advantage of them as a buyer. To that end, we’ve created a list for you below. Read it over so that you have a better idea of how to get started working towards your goal of buying a property.

Start saving up for a down payment

If you haven’t already, start saving up for a down payment. While you definitely have some time before interest rates start rising substantially, that day will come. Before it does, you’ll want to make sure that you have all the pieces in place that you need to become a qualified home buyer. These days, that means having at least 3% to 5% of the home’s purchase price on hand for a down payment, plus an additional 2% to 5% for closing costs. 

Get pre-approved for a loan 

Once you have enough money saved, the next step is to talk to a lender. At this point, they will try to pre-approve you for a loan. notably, pre-approval is different than pre-qualification. In this case, the lender will actually look at the specifics of your financial situation in order to determine how much the bank is willing to lend you for a home loan. 

Having one of these letters in hand will not only help you to appear more serious in the eyes of the cellar, but it will also help you set your budget for your home search.

Begin your home search

After you’ve gotten pre-approved, you will be ready to begin your home search in earnest. This is where you will talk to a real estate agent about what you want and need in a home, look at all the available possibilities, and go see your favorite options. Once you find something you love, you’ll be ready to put in an offer and take your first steps for becoming a homeowner. 

How to take advantage of low-interest rates as a seller

As you might be able to guess, your journey is going to be a little bit different as a seller. While it’s still absolutely possible to take advantage of the current low-interest rates, in this case, it’s going to be all about how to maximize the profits that you get out of your largest asset. With that in mind, we’ve listed some tips below to help guide you through the process.

Ask an agent for a comparative market analysis 

The first step to take advantage of low-interest rates is learning how much your home is worth. For that, you need to ask a real estate agent to prepare a comparative market analysis for you. At its core, a comparative market analysis uses other, similar, recently sold properties to help determine the fair market value of your home.

Decide whether it makes sense to sell

Once you have that information, you can decide whether or not it makes sense to put your home up for sale. To do that, you need to look at how much you owe on the property versus how much you can expect to make from the sale. You’ll also need to look at what you would need in a new property, as well as what you could get for your money in the current market.

If you do decide to sell, set a reasonable list price

Lastly, if you do decide to sell, make sure to set a reasonable list price. Too often, sellers mistakenly believe that if they set the list price higher, they will get a higher sale price. However, unfortunately, that is not the case. in this market, if you set the list price right along with your competition (or even a bit lower) you’ll be very likely to receive higher offers.

The bottom line 

Low-interest rates are here to stay for the foreseeable future, which is a good thing. no matter whether you’re a buyer or seller, there are ways to capitalize on today’s low rates. Use the tips in this article to help you take advantage of these interest rates while they last.