SPRINGFIELD, Mo. (KY3) – The year is ending with a present for current and future homeowners. The United States is seeing historically low mortgage rates for yet another month.
”Your ability to save thousands of dollars over a 30-year or 15-year mortgage is great right now, so it’s definitely a great time to buy a house for anyone looking,” said Andrew Chavez, President of Signature Lending LLC in Springfield.
Back in January, Chavez said mortgage rates were averaging around 4%. Now, he said the normal mortgage rate falls between 2% and 3%. Chavez said while it’s a great time financially to settle down in a new home, it may be hard to get your hands on one.
”We are seeing some inventory shortages, especially here in southwest Missouri. It’s really fueled a hot real estate market,” he said. “So there’s competitive offers on pretty much any house.”
Chavez said in the third quarter of 2019 homes would sit on the market for about 55 days. This year?
”Most places, if they’re priced well, they’re selling in less than 15 days, or under contract in less than a week,” he said.
When it comes to refinancing, Chavez said now would be as good of a time as any.
”Borrowers that are in a 30-year program, maybe they’ve been paying for three years, now they can get that same payment rate on a flex term for like 20 years,” Chavez said. “So, we’re seeing significant savings because of the low interest rates.”
He said the financial situation many families were put in throughout this pandemic did take a toll on big mortgage companies.
”We had about 8% of mortgage loans in forbearance so [Fannie Mae] and [Freddie Mac] were losing a lot of money on loans,” Chavez said.
Because of that, Chavez said the companies instituted a 50-point hit on refinances to make up for the losses. That was supposed to go into effect Sept. 1, but was postponed until the first of this month.
”We’re seeing small effects on it, a lot of wholesalers and large lending companies are still pretty aggressive in their pricing on the conventional side,” Chavez said.
While he said purchases typically come to a bit of a halt during the holiday season, refinancing does not.
“We do see a pick up in cash-out refinances, sometimes people need cash for the holidays, and they will have different reasons for needing to cash out and take advantage of some of that equity that they have in the house,” Chavez said.
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