Since the middle of 2013, financing your Irvine real estate purchase has gotten a little more expensive due to the rise in mortgage interest rates. For over a year now, rates on a 30-year mortgage (the most popular mortgage option utilized by home buyers) have been in the 4 percent range, with the 15-year rate around a percentage point lower. Many potential buyers have been turned off by the higher rates, even though rates in the 4% range are still historically low (if you want some perspective on today’s rates, ask anyone you know in an older generation what the interest rate was on their last mortgage before they hopefully refinanced). The good news for buyers waiting to see if rates would drop to lower levels is that your wish has come true.
Last week, for the first time since June 2013, interest rates on a 30-year fixed mortgage fell below the 4% threshold and are currently sitting at a national average of 3.95% (according to data from CNN Money). The 15-year fixed rate is hovering right around 3% and may drop into the 2% range in the next few weeks if overall rates continue to fall.
Let’s put this in perspective so you understand the kind of savings you would realize with the current 30-year rate versus what it was a few months ago (around 4.25%). If you bought an Irvine Home, Condo or Townhome when rates were at 4.25%, your monthly mortgage payment on a 30-year fixed plan (principal and interest) would be $1,771. At the current rate of 3.95%, your monthly payment drops to $1,708, a difference of $63. On a yearly basis, this represents a savings of over $750; if you stay in your home for the next 30 years (the life of the loan), you would save over $22,500 under the current mortgage rate.
So what do all of these numbers and projections mean for you? If you have been on the sidelines waiting for your Irvine home buying opportunity, this is the best time in over a year to take the plunge. With over 600 listings currently active on the Irvine Real Estate Market, the opportunities are there for the taking.