The coronavirus panic shaking world markets has offered home owners a historic opportunity to purchase or refinance home loans at extremely low interest rates.
For the week ending on March 6, 30-year fixed rate mortgages for top tier scenarios (such as borrowers with good credit) are getting snagged for rates as low as 3-3.25%.
According to Mortgage News Daily, loan originators are saying that borrowers are taking advantage of this opportunity:
“It’s getting utterly crazy in mortgage world, hearing about lenders requiring 100 day locks, some no longer accepting new loans, etc. […] If you can grab a rate very near the lowest in history, why risk missing out? I am locking everything I can, regardless of closing date.”
Low rates persisted throughout the week, failing to bounce much higher from their all-time lows, due to the coronavirus fears worsening over the course of the week and 10-year bond yields tanking below 1%.
Matthew Graham explains that:
“Big, long-lasting improvements such as this one are increasingly susceptible to bounces/corrections, but 2020’s coronavirus outbreak has provided a second wind for low-rate momentum, quickly bringing rates into all-time low territory.”
If you are a home owner a prospective buyer, now is the time to lock in at these historic low rates. The good news—from an opportunistic perspective, not for public health—is that the coronavirus is not going away any time soon, and you have some time to shop around for rates and find a lender with a great rate that you would like to work with. While it is possible that the coming weeks may see a bounce in mortgage rates, most experts are betting that they will remain at these levels for some time.
Your stock market portfolio may be doing poorly during this downturn, but there are always opportunities during downturns, and you have “to buy when there’s blood in the street,” as the saying goes, or “strike when the iron is hot.” In this case, there is a rare opportunity to buy a home for a reduced overall price or lower your monthly payment to a substantial degree.
If that isn’t convincing enough, there also reports that lenders and real estate agents are taking this opportunity to lock in their own refinance rates, as Matthew Graham notes.
“Speaking of those mortgage professionals, the ones I know (and I know a lot) are increasingly talking about locking their own refinances. Past precedent has a lot to do with this as we’ve seen rates this low only twice, and there hasn’t historically been too much time to think it over or wait for things to improve before something changes.”
Since mortgage professionals can refinance at the best rate at any time for almost no cost, it would be wise to follow their lead when it comes to timing your mortgage refinance.