So, you’ve been careful with your money all these years and have always put some aside for a rainy day? Good for you! Even when the economy appears strong, those who plan ahead can benefit from its weaknesses by taking advantage of market conditions. Even mortgages can benefit during these economic times as rates tend to drop when weak economic data is reported. How can you as a savvy consumer benefit from this? It’s as simple as following the numbers!
Economy
Weak economic data usually means that consumers are pulling back on spending and are concerned about their jobs and other financial matters. However, that is somewhat the case now due to COVID. As a result, the mortgage market usually sees a drop in demand for mortgages and a drop in the interest rate charged for mortgages, not now. Those who have put off buying a house for some time and have stellar credit may find that they can get less house for more money and a great rate to go along with it during this economic downturns! And the housing issue now is the opposite, with prices elevated, interest low, and a market where cash is king.
Mortgage/Interest
It pays to keep on top of mortgage rates which often change at least week to week. For current rates for new purchases and refinancing visit, https://www.bankrate.com/. Suppose you are considering taking on a new mortgage. In that case, one item that you should pay attention to that could potentially raise the rate is inflationary data, which we are experiencing now. When the market sees data that shows inflation is going up, mortgage rates tend to rise. After all, the value of a dollar becomes less as inflation is factored in. Suppose you are thinking about buying a house. In that case, you could save yourself as much as half a percentage point just by knowing when the Federal Reserve releases inflationary data and locking in your rate before that if you think the data will show inflation is on the rise.
Just like in the stock market, for the real estate investor out there – or even those looking to buy a new home – the best time to buy is when the market is down, not at the moment. The house that may have been outside your price range could suddenly be reduced tens of thousands of dollars after the market shifts. Combine that with an interest rate that is half a point to a point lower than what you were expecting, and soon you find that a house that you thought would be a struggle to afford is a comfortable financial fit!
The economy rises and falls, but it all evens out over time, and most everything – including housing – stabilizes. By planning your real estate purchase and keeping your credit in shape, you can set yourself up to take advantage of the economic downturns and come out of it in better shape financially than you thought possible!
It’s a seller’s market out there now – do your homework and be prepared to use some patients in the search and purchase of your new home! To obtain a rough estimate on the value of your home or the one of a property you are interested in visit, https://www.zillow.com/.
To better understand what you can and cannot afford, consult a fee-only Registered Financial Consultant to assist you in determining what you can truly afford. Based in Nashville, Tennessee, KG Meyer, PC can help you do just that. Mortgage companies will approve you for more than you may be able to afford. Do not fall into the trap of buying more house than you can afford in the end.
