Featured News 2015 Mortgage Rates Drop: Is Now the Time to Buy?

Mortgage Rates Drop: Is Now the Time to Buy?

As mortgage rates drop to historical lows, it would be easy for many potential homeowners and investors to jump on the trend and use the seemingly great rates to their benefit. Are these low rates really as good as they seem though? Some are suggesting that they are not as attractive as they initially appear when you dig a little deeper.

For the first three weeks of 2015, mortgage rates consistently declined. By the middle of January, 30-year rates had dropped as low as 3.66 percent. This significant rate may be the lowest in more than a year and close to a historical record, but potential buyers shouldn't get too elated just yet. While these rates can make it beneficial for new buyers and homeowners who opt to refinance, it may not be as lucrative for individuals who are looking to invest in property for profit.

Why should homeowners and investors be cautious?

These extremely low rates will likely give homeowners or buyers more benefits than those that are looking to invest, but all parties should be cautious when attracted by the mortgage rate drop.

Some reasons that these low rates may not be as great as they appear:

  • Calculated with inflation, the rates may not be so low
  • Many bank rates for short-term deposits have fallen even more
  • Prices of real estate property may be vulnerable with great falls and rises

While many people see low mortgage rates as a positive, it is important to keep a long-term vision of the real estate market. For example, if you buy a home now with a low mortgage rate, a spike in the rates in a few years could adversely cause your real estate property value to drop. If you intend to sell your home down the road, this could greatly impact the profit you are able to gain.

However, there is no denying that the low mortgage rates can truly benefit consumers. Housing is more affordable than ever and those looking to buy for long-term purposes may be in the best position to capitalize on these benefits. On the flip-side, investors and first-time homeowners who wish to sell their property to make some profit in the future may need to think twice before purchasing with such low rates.

Want to get seasoned advice on the current market? Looking for legal counsel during your real estate transaction? Check out our directory to find a real estate lawyer in your area.

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