Mortgage rates hit a new low last week once again as the 30-year fixed averaged 3.87%, and the 15-year fixed fell to 3.14%. Even just a year ago, the rates were nearly a full point higher, sitting at 4.81%, and costing borrowers thousands of dollars more a year than what they would be paying at today’s rates. The rate drops come on the heels of the latest GDP news and as both unemployment and foreclosures have seen recent drops as well.
The record low rates are presenting those in the market for a new home in Sussex County, and throughout the country, with a very interesting opportunity. Never have rates been lower, and with the worst of the economic downturn behind us, it’s only a short matter of time before rates once again start to climb. To put this into financial perspective, consider the following excerpt from CNNMoney.com regarding the new rates:
“The difference in the monthly payments between a 4.81% loan and a 3.88% is about $54 for every $100,000 borrowed. For someone with a loan balance of $250,000 that comes to more than $1,620 a year.
But many of the borrowers that Obama’s plan would help currently have mortgages that carry interest rates of 6%, 7% or higher. If someone with a $250,000 mortgage carrying a 7% rate could refinance into a 3.88% loan, it would reduce payments by nearly $6,000 a year.”