Borrowing costs dropped to their second-lowest levels in three years, offering home shoppers an opportunity to lock in lower monthly mortgage payments.
The lower rates are “supporting homebuyer demand and leading to higher refinancing activity,” says Sam Khater, Freddie Mac’s chief economist. “Borrowers who take advantage of these low rates can improve their cash flow by lowering their monthly mortgage payments, giving them more money to spend or save.”
Low mortgage rates likely will stick around. The Federal Reserve on Wednesday voted to leave its benchmark rate unchanged. The Fed’s short-term rate does not have a direct effect on mortgage rates but does often influence them. “If the Fed is on hold, we are at least on hold with lower interest rates,” Greg McBride, chief financial analyst at Bankrate.com, told CNBC
Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 30:
30-year fixed-rate mortgages: averaged 3.51%, with an average 0.7 point, dropping from a 3.60% last week. A year ago, 30-year rates averaged 4.46%.
15-year fixed-rate mortgages: averaged 3%, with an average 0.7 point, falling from last week’s 3.04% average. A year ago, 15-year rates averaged 3.89%.
5-year hybrid adjustable-rate mortgages: averaged 3.24%, with an average 0.3 point, falling from last week’s 3.28% average. A year ago, 5-year ARMs averaged 3.96%.
Did you know that you can transfer a flood policy that has old “grandfathered” mapping from a seller to a buyer? Flood insurance is very difficult and constantly evolving and we know someone that can help you with the in’s and out’s.
For this to work, the flood insurance policy must be put into transition BEFORE the closing. So when you are selling your home, make sure that you disclose your policy and what you have in place, if any. As a buyer, you’ll want to ask the seller if they have anything in place for flood insurance.
Flood insurance through the government (called NFIP) has the following type of coverages:
Landlord or secondary homes do not offer replacement cost for the flood losses on the structure as we expect on our home/fire policies . Flood loss settlement is done with ACV (with depreciation). This is similar to how your car insurance losses are settled when you have a car totaled. You don’t get a 2020 Buick if you were driving a 2012 Buick.
NFIP flood coverage for the structure maximum is only 250K. Excess flood and/or private flood insurance can be utilized to increase coverage.
Mortgage companies force place flood insurance when it is absent. This is only when the loan requires flood insurance in higher risk flood zones.
Your home is one of the biggest, if not the biggest, investment you will make in your life. Be sure to protect your asset. Work with your Realtor® as you buy or sell your home and work with TWFG for your insurance needs. As always, you can call or text me at 832-928-3019.