Mortgage Rate Update

After months of higher borrowing costs, we finally got a bit of relief as the Fed recently cut rates by 25 basis points. They’re shifting focus toward a cooling job market, and that’s translated into lower loan rates for consumers. Mortgage rates are now sitting at their lowest level in almost a year. If you’re in the market to buy, you could be looking at high 4% to low 5% for ARM terms and mid-5% (give or take) for a 30-year fixed. Not surprisingly, that’s brought some fresh energy back into the housing market.

For those of you who’ve been waiting to refinance, now might be your window. Just remember: it’s not always as straightforward as it was in the early 2020s when rates were dropping and equity was climbing. Some neighborhoods have seen slight price corrections, which can throw a curveball into the math. For example, let’s say refinancing could save you $200 a month, about $2,400 a year. Sounds great, right? But if your home appraises $50,000 lower than expected, you may have to make up that difference with cash before the refinance even goes through. For most people, that kind of trade-off doesn’t add up (literally, it could take nearly 20 years of those monthly savings to “earn back” the $50K).

The appraisal is just one factor, though. Some lenders may even let you skip it altogether if you bought your home in the last year.

If you’re not sure which way to go, reach out anytime. I can connect you with trusted lenders and help you figure out what makes the most financial sense for your situation.