At the end of July, the Federal Reserve cut interest rates for the first time since 2008. What does that cut mean for you?
If you purchased a property between 2014 and 2018, there is a good chance that your current interest rate is higher than today’s rates. This opens the door of opportunity for those looking to reduce their monthly mortgage payment, reduce the mortgage repayment term or tap into home equity.
For existing homeowners, refinancing your loan balance to a lower interest rate can translate into a lower monthly mortgage payment, freeing up some money in your budget. Refinancing can also be an opportunity to switch from a 30 year repayment term to a 15 year repayment, though this may come with a slight increase to your monthly mortgage payment.
While historically, refinancing has been driven by a motivation to reduce monthly mortgage payments, more and more homeowners are refinancing to tap into their home equity and fund home improvements. If you have kitchen or bathroom renovation dreams, now may be the best time to make those a reality.
For those who already have a variable rate home equity line of credit (HELOC) on their property, the rate cut won’t result in instantaneous savings. It generally takes 30-60 days after an interest rate drop by the Federal Reserve before such savings are evident.
Of course for buyers, today’s lower rates translate into more purchasing power which is crucial in the competitive Greater Boston markets. Sometimes knowing you can stretch just $20k more for a property today than you could have just a year ago is enough to beat out the competition.
Regardless of whether you are looking to refinance or secure your first home, we have a number of highly trusted mortgage professionals our clients have enjoyed working with. We would be happy to connect you with a lending professional who can assist you.