It seems like every week we hear about mortgage rates dropping. And if you've seen the numbers, you know that really is the case. Rates are at the lowest point since the 1950's, but where do you turn if you want to buy or refinance? Our Fact Finder team is looking closer at this.
Whether you are refinancing or buying a home, it really does pay to compare rates and look for creative deals.
It's been 60 years since mortgage rates have been this low. If you haven't taken advantage of it already, now is the time to at least take a look at how much cash you can save.
"In the late 70's, early 80's the interest rates were around, I think, 21 percent," said Remax Realtor Lisa Smessaert.
Smessaert is in her 26th year as a realtor and says low mortgage rates are driving up homes sales.
"I can see the difference. I can see inventory in certain areas not what it was before. There's not as much to choose from. And it's not just home purchases, refinancing continues to thrive," said Smessaert.
"It's hard to believe that they've actually gone lower than what they were a couple of years ago," said Lender Jonathan McKinnies.
McKinnies with Hallmark Home Mortgage says to get the loan process started now because the market may not continue in this direction.
"If you’re going to be moving out of the home in the next couple of years, then re-financing may not be good for you. But if you plan on being in the home for awhile, then re-financing is something to consider," said Mckinnies
Here's an example: Your monthly mortgage payment on a $150,000 loan at 5.5 percent is roughly a thousand dollars. But look at rates now – 3.5 percent. You save almost $200 a month. You also save more than $150,000 over the life of the loan.
"If their main goal is for cash flow savings, then you're probably going to keep them in a higher term because you compare term to term, so 30 to 30 you’re going to get a lower payment. But if their main goal is to pay it off in a short amount of time, than 15 is good," said McKinnies.
That savings may even help you find your dream home
"If the house is priced right and it's in a really good location and it's in good condition, they go pretty quickly," said Smessaert.
If you're looking to buy or refinance, check with your local lender but also take the time to compare rates online. And also pay close attention to refinance charges or closing costs. It's not always apples to apples.
Remember that homeowners insurance and property tax will also increase your monthly payment.