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June 2020 Mortgage Matters: Should you refinance right now?


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Hopping into the home market is never easy, especially during the recent economic events. (But our summer intern is a finance major, which is an incredible help!)

Thirty-year fixed mortgage rates have steadily fallen since 1990 from 10.5% to 3.3% in 2020, and that tailwind undoubtedly helps to increase home values by making them more affordable.

As shown below, the 30-Year Fixed Rate Mortgage in the United States fell steadily from 4.1% in 2015 to 3.4% in 2017 with a sharp spike to 4.3%. After gradual climbs from 2017 to 2019, a drastic drop occurred in early 2019 after the 30-year fixed rate reached 5%. Mortgage rates are now lower than ever before! (Credit: FRED Economic Data)

Interest rates have fallen, which is good news for homeowners!

In a larger context, the graph below is from the year 1990. Among other factors, mortgage rates are very susceptive to two things: the demand for homeownership overall and the amount of people buying versus renting homes. This would lead you to ask: what does the homeownership graph look like?

Homeownership is expected to rise!

Home purchases saw a sharp drop from 7.25 million in 2006 to 3.5 million in late 2010 (Statista). Now, home sales are trending upwards with increased estimates through the year 2021, and this is a good thing for you! To prepare, consider using tools such as vipHomeLink to help you make your home more valuable (not to mention safer!). With low mortgage rates and promising data showing home sales on the rise, why wouldn't you want to improve your home?

If you are looking for a way to free up money to give your home some TLC, re-financing may be an option! You might consider switching from a 30-year fixed mortgage to a 15-year fixed mortgage to help you pay it off sooner. Perhaps you want to try a "cash out" refinancing (or taking some $ off the table) to provide you with capital to improve or upgrade your home.Or, it may simply be time for you and your family to upgrade to a bigger one.

If you feel that switching to a lower rate mortgage -- to reduce your monthly payments or free up some money -- will provide a better home experience for your family, why wait? Contact your mortgage broker or lender now!

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