by Christy Bieber | Sept. 4, 2020
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Good news for homebuyers: Mortgage rates are likely to remain low for years. Check out why, learn why now is a great time to buy mortgage points, and read more top mortgage stories from the past week.
In today's world, things can change quickly with respect to mortgage rates and more. Check out these top stories from The Ascent to keep up to date.
Many homebuyers are asking, how long will these record low mortgage rates last? Last week, Federal Reserve Chairman Jerome H. Powell provided an important clue. Powell indicated the COVID-19 recovery will be lengthy, so the Fed is likely to keep the benchmark rate near 0%. While the Fed doesn't control mortgage rates, its decisions influence policy. If the Federal Reserve keeps the overnight rate at which banks borrow from each other at rock bottom, this suggest mortgage rates should stay low for a long time to come.
Mortgage points cost 1% of the value of your home loan and reduce the rate by 0.25%. They make sense to purchase if you'll remain in your home for long enough (and not refinance for long enough) for the savings from your reduced rate to cover the up-front cost of the point. With mortgage rates so low right now, it's unlikely most homebuyers will be refinancing in the near future or paying off their mortgage early, so it can make more sense than ever to buy a point to make today's record low rates even lower.
Would-be homeowners who can't come up with the cash to purchase a house have other options including buying a condo, buying a home jointly with a friend or family member, or purchasing a home and renting out part of it. With mortgage rates near record lows, now may be a better time than ever to consider some of these options.
Home prices vary in different parts of the country. Check out the 10 most affordable states -- including West Virginia and Indiana -- where your dollar will stretch much further. If you live in one of them, you just may be in luck if you're hoping to become a homeowner but you don't have a huge budget to work with.
While some locales provide a bargain for would-be homeowners, others have home prices so high it can be difficult for the average person to cover the costs. This list of the 10 states where it costs the most to purchase a home includes some places you'd expect, such as California, but also a few surprises.
Refinancing is a hot topic these days, with millions of homeowners taking advantage of record low rates to refinance and drop their monthly payment or total interest costs. When calculating savings, remember to consider both how much you save on your payment as well as the big picture of how much you'll save over the long-run. This guide will help you do the calculation.
Whether you're in the market for a new house, or hoping to refinance a mortgage, be sure to follow The Ascent's mortgage coverage. We'll keep you updated on what you need to know throughout your journey to help you make informed choices and keep your borrowing costs affordable.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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