(CBS) — People looking to buy a home or refinance their current mortgage are in luck. Mortgage rates have dropped again, and financial experts say the coronavirus is one of the reasons why.
According to FreddieMac, the mortgage rate for a 30-year-fixed loan has dropped over the past two years from 4.44% to the historic low of 3.29%.
“This is a great time to either buy or refinance your mortgage,” says CBS News Business Analyst Jill Schlesinger. She says investors worried about the economic impact of the coronavirus are buying safer U.S. treasury bonds, and that’s pushing down rates for the 10-year Treasury. “That’s important because mortgage rates often key off of the 10-year Treasury,” she says.
Amy Gevorgyan recently bought her house in Los Angeles. “I grew up in this neighborhood and I’m very happy that we’re making a move on this home,” she says. Gevorgyan made an offer on her house in early February. She’s now getting a mortgage, and interest rates have dropped so low that she expects to save $300 a month.
Many existing home owners are taking advantage of low rates to refinance current mortgages. Refinance applications are up 224% in the past year, according to the Mortgage Bankers Association. “You want to determine, if I were to refinance how much would I save every month? And then, how long will it take me to recoup the closing costs if I do see a drop in my monthly mortgage payment? It may not make sense for you, especially if you’re not sure whether or not you’re staying in the home over the long term,” Schlesinger says.
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