Mortgage rates are about as low as they have ever been. Check out this graph we found on the Forbes magazine website.
Why is this happening?
With a pretty flat economy here in the United States, more and more investors are looking for “safe money” investments, like bonds. With higher demand, bond prices rise and interest rates fall. In fact, the 10-Year Treasury note, a reliable indicator of financial market health, is at its lowest rate since 1790 – when our country was raising money to pay off the Revolutionary War!
Financial analysts expect this trend to continue through 2026, begging the question if we are headed into another recession over the next 10 years.
The problem is not just here in the US, either. In Germany, Japan, Switzerland, Denmark, and the Netherlands banks are posting negative interest on deposit accounts! That means people are so unsure about the economy that they are willing to PAY the bank for the privilege of parking their money there. It’s like they are renting a savings account.
So what does this have to do with mortgage rates?
You would think that if interest rates are still headed down, you should wait to get a mortgage… maybe you’ll get an even better rate, right?
Mortgage lenders only make money when they can collect interest. If the interest rate they collect does not cover their expenses, with at least a little left over for profits, they would go out of business.
So… mortgage interest rates probably aren’t going to drop much lower.
But, if the 10-year Treasury notes are as reliable of a predictor as the “experts” claim, the economy might be headed for another downturn.
So… if you are in a position to apply (and get approved) for a mortgage, now may be the very best time. Interest rates are about the lowest they’ve ever been and it is very unlikely that they will get any lower.
Plus, the housing market is pretty tight now, especially in the first-time home buyer price range. If the economy does hit another slump, there will be even fewer homes available.
Add them together and you’ve got a home buying sweet spot.
Here’s an idea of what you’ll need to get approved for a FHA loan for a $200,000 home
>> Credit score of at least 580 (to qualify for a 3.5% down payment)
>> Down payment of 3.5% = $7,000
>> Closing costs of about $2000 and $3500 for an upfront mortgage insurance payment (both of which can be rolled in to your loan)
>> Income to support $1,000 mortgage payment +$134 monthly mortgage insurance
The NCES credit restoration program is available coast to coast. We work with people from all walks of life with all kinds of credit histories. Our customers often see great improvements in just a handful of weeks and when the process is done, they have realized 50, 100, even 150 point increases.
Want to learn more? Schedule a free consultation to see how NCES can help you improve your credit score and get you into your house while the market is in this unique sweet spot.
If you have any questions, please give us a call at 770-952-5168 or contact us online.
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This information is intended for informational and educational purposes only and not as legal advice. If you have concerns about your credit report, harassment, identity theft, illegal collections activity, garnishments, or property liens, you should consult an attorney who specializes in consumer rights and defense.