Local Voices
Lower Mortgage Rates Usher in Homebuying Season
Spring is right around the corner, and more people will be looking for a new place to call home. Fortunately, mortgage interest rates are dipping just in time for the spring rush, leading to improved affordability for most home buyers.
Current Interest Rates
According to the Freddie Mac’s Primary Mortgage Market Survey (PMMS), rates have fallen again after a two-week period of increases. At the end of the week, borrowers with good credit could secure a fixed rate 30-year mortgage with an interest rate of only 4.34%. These are down from 4.53% in early January. The rate for a 15-year mortgage also fell from 3.55% to 3.38%.
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Building Equity
Not only do lower interest rates lead to lower payments, but they also speed up equity accumulation. Every mortgage payment is divided into interest and principal. During the earliest years of your mortgage, a greater amount of each payment goes toward interest. In fact, according to the Mortgage Reports, early mortgage payments during 2009 were composed of 85% interest and only 15% principal. However, early mortgage payments under today’s rates are composed of 78% principal and 22% principal. This means that equity accumulates much faster, allowing you to refinance sooner, make a bigger profit when you sell or simply build wealth more quickly.
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Tezsia Mills
Republic Mortgage Home Loans
Loan Officer | MLO# 1173866
Direct 206-304-0935