With the historically-low mortgage rates triggered by the coronavirus (COVID-19) pandemic, the 2020 real estate market saw a significant boost. Those who had been waiting to buy a home went all in for affordable loans. Whereas, those who had been wanting to sell their property benefited from increased home prices.
Turn to 2021, and the market activity that stemmed from low mortgage rates has continued for the most part. If anything, the Federal Reserve’s decision to keep its benchmark rate near zero indicates that the trend here to stay. For many existing homeowners, it also outlines the opportunity to avail the best refinance mortgage rates noticed in a while.
Why This is the Ideal Time to Refinance Your Mortgage
On Wednesday, March 17, the Fed announced that it will keep its benchmark interest rate near zero. With an indication to follow these rates through 2023, the decision was taken for economic support during COVID-19 recovery efforts.
At the surface level, the benchmark interest rate is not directly tied to the rates that banks charge their borrowers. With that being said, it affects the internal financing mechanisms of banks and large scale institutions. As a result, it has an influence on interest rates of loan products such as mortgages.
Due to this reason, the Fed’s decision to maintain an almost non-existent benchmark interest is good news for retail borrowers. This is especially true if you obtained a home loan at higher rates but qualify for mortgage refinance in 2021.
Mortgage Rates Have Started Recovering from Last Year
The Fed’s recent decision may continue to affect the 10-year U.S. Treasury bond that indirectly influences mortgage rates. But there’s a high chance that these rates may not continue to stay at record lows. As the economy recovers, mortgage rates may veer further away from their average standpoint in 2020.
This phenomenon applies to all types of mortgages that range from purchasing a new home or refinancing existing properties. If lowering your debt is a priority to your financial well being, you should not wait to avail current opportunities.
Don’t Hold Yourself Back From Taking Advantage of Lower Interest Rates
While the current mortgage rates might not be the lowest, they still offer a pretty good deal over past rates. This can help you lower your overall debt, reduce your monthly payments, and deliver more affordable loans as a result.
Finding the best refinance mortgage rates may seem daunting at first. But it is not that difficult. You can find this information over a quick search on the web or through dedicated real estate portals. From there, reaching out to a lender and going through the application process is quite a straightforward process in itself.
By looking into this opportunity, you can make the most out of the current mortgage rates and reduce your debt. This allows you to pay off your mortgage in a more affordable and easier way.
© 2021 AFTHA PROGRAM All rights reserved.