Interest rates on home mortgages remain at record lows and that could make now the right time for area residents to make some big financial decisions. Diane Roose, Assistant Vice President and Mortgage Loan Officer at Marion County Bank in Pella, says by having to spend less money on interest, home buyers are essentially able to get more home for their money.
“Just looking at an interest rate on thirty years, if you borrow $150,000, you can get a monthly payment of around $750 a month,” says Roose. “Now if you go up a couple percent on your interest rate, and your payment becomes around $950 a month, so obviously you can qualify for more house with lower interest rates.”
Additionally, Roose says lower mortgage rates could also make now a good time for borrowers to look at refinancing their current mortgage, based on the difference between current interest rates and the amount they have locked themselves into.
“A general rule of thumb that we use is if you can save one percent [on your interest rate], it’s probably a good time to look into refinancing,” said Roose. “Obviously the amount you’ve borrowed makes a difference. It might be less than a percent if your loan amount is really high; if your loan amount is really low, it might not be worth your time at all. I just advise people that its always a good idea to check with a local lender and see if its something that’s worth your time or not.”
Mortgage rates follow the ten-year treasury, which has seen a drop, mainly due to a weaker European market.