Weekly mortgage applications jump as rates fall

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Last week, the yield on 10-year Treasuries fell, which mortgage ratesthat tend to follow this yield plummet. Result? The 30-year mortgage rate hit its lowest level since February this year, while the 15-year mortgage rate hit an all-time low, last seen in 1990.

Unsurprisingly, in light of these falling rates, there has been a spike in mortgage activity. The total number of mortgage applications increased by 5.7% in the week ending July 23, and most of this activity was in refinancing

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What to do now when mortgage rates are so low?

When mortgage rates fall, it can be tempting to either speed up home buying plans or rush refinance an existing mortgage… But is it right?

If you are looking for a new home, you should be aware that today’s housing prices are very high and inventories are very low. So it may be difficult for you find a home that you can afford… Or, you might find a home that you can technically afford, but it might not be the home you really want. You may have to settle for a smaller home or one that is not in the best condition.

Before you decide apply for a mortgage.Ask yourself:

  • Am I stretching my budget too much by buying today?
  • My credit rating strong enough to get a competitive mortgage rate? (Typically, you will need an average to above 700 to qualify for the best bets available.)
  • Am I in a hurry to move, or can I stay where I am and see if house prices fall?

Answering these questions will help you make a decision.

Meanwhile, if you are thinking about refinancing your mortgage, this may be a more viable option than buying a home in today’s environment. hot market… Refinancing can cut your monthly mortgage payments and make your home more affordable to pay off. It can also save you money in interest over the life of the loan.

But to see if refinancing is right for you, ask yourself:

  • Will I be able to reduce my mortgage interest rate by at least 1%? (This is usually a good target.)
  • Is my credit rating good enough to qualify for a high refinancing rate?
  • Do I plan to stay in my home long enough to earn savings after payment closing costs? (If you are charged $ 5,000 for a new loan and that lowers your monthly payments by $ 250, you will actually only save money if you stay at home for 21 months or longer.)

At the same time, mortgage rates, including refinancing rates, have been competitive since the beginning of the year, now they are even more attractive. This gives you a great opportunity to save money on a new or existing home. Just make sure it is the right time to buy a house or refinance your mortgage before moving on. Both are important decisions, and you must think carefully about them so that you do not regret them later.

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