Why It May Be a Great Time for You to Buy a House
Buying a house is a very personal decision. As things stand right now, there is no telling how the lowered rates are going to prompt people looking to buy houses. In a bid to counter economic slowdowns and disruptions arising from the rapidly spreading coronavirus, March 15th saw the Federal Reserve make yet another emergency cut to interest rates. The latest move by the Fed has become the most significant emergency reduction in its entire 100-year history. So is now the time to buy a house?
The move is meant to encourage more money into the economy and lure businesses to continue investing. Financial analysts and property market observers foresee that this move is sure to induce a lot of borrowing and spending.
So now may actually be a good time to buy a house. Here is how you stand to benefit as a home buyer and make the most out of the lowered interest rates to acquire a property.
1. Take advantage of the now subsidized Home Equity Line of Credit (HELOC) Rates
If you are looking to buy a house on credit, now would be an excellent time to try out a Home Equity Line of Credit option. Rates on HELOCs have fallen hugely. The lower rates have seen prospective homebuyers become the biggest winners in the ongoing turn of events. Since interest rates on HELOCs are pegged on the prime rate, the falling of rates means lower borrowing costs. This is because prime rates follow any adjustments that are made by the Fed.
This is beneficial to anyone looking to buy a house as it provides arguably one of the most economical housing solutions at hand in the property market. This move is likely to attract and steer higher customer numbers looking to benefit from the prevailing circumstances. This will have a ripple effect not just on the residential but on the entire property market.
2. Take advantage of the historically low mortgage rates
With the Federal Reserve having lowered rates, the rest of the financial market reacts accordingly. This means that home buyers get an opportunity to obtain mortgages more advantageous to them. These mortgages have lower interest rates, something that spells out long-term financial benefits for the home buyer.
To reap from lowered mortgage rates as a prospective house buyer, you would want to take an interest in the Adjustable –Rate Mortgage(ARM) option. When taking up this kind of mortgage, especially now that the Fed has lowered mortgage rates to zero, you will need to consult widely.
Engaging someone with expertise in this field, preferably someone well versed with how buying a house in a specific area you wish to buy one, is very important. You will need their advice and expertise as you look through details such as the various mortgage types, whether the mortgage is fixed or adjustable, and the rate to which the mortgage is linked.
3. Take advantage of the dip in home financing costs
One of the significant reap offs since the Federal Reserve slashed interest rates is the reduction in the price of financing a home. Any serious player in the housing sector will tell you that today is the appropriate time to source for financing to buy that house you have been looking for.
The presently available low-price financing by lenders and the government could generate bigger returns for your house investment even if you are looking to resell later. Seeking alternative financing for buying that house you have been looking to buy could be quite a considerable gain. In the long run, alternative financing could see you spend less yet attain more excellent value as compared to taking a mortgage.
The rate cut by the Fed has greatly reduced interest payments on home financing. This could see prospective house buyers save a lot of money that would have otherwise been incurred as interests.
During these uncertain times that we are dealing with COVID-19, it’s actually the perfect moment for you to buy your dream house. If you are considering buying a new house, feel free to contact us today for more information.