Low Mortgage Rates Housing Deals Equals A Good Time to Buy
In case you haven’t read it anywhere else, now is a great time to buy a house.
Yes, experts have been saying this for the past couple years, but this week, mortgage-finance company Freddie Mac released a statement that the 30-year mortgage rate—3.83%—is the lowest it’s been since Freddie Mac started keeping records in 1971.
It’s time to snap up the bargains while they’re still out there. According to CNN Money, the Mortgage Bankers Association is forecasting the 30-year fixed rate will hit 4.5% by the end of the year.
Contrast that with U.S. Census Bureau’s numbers from the end of April showing that home ownership in the U.S. has hit a 15-year low. A lot of housing stories are attributing that to those in the millennial generation—those currently graduating college, starting careers and into their early 30s—have eschewed the historic adult rites of passage, like marriage, babies and home ownership, in favor of living with their parents or getting an advanced degree to better compete in the job market.
For those who can, though, it’s time to move out of the basement or childhood bedroom and buy a home. Home ownership being low means there are homes on the market and deals to be had. Worried about your credit score? You’ll never know if you can get a mortgage until you start the process. But according to the results of a Federal Reserve survey in April, you might not have to worry as much as you think. More than 90% of the senior loan officers surveyed said they were at least as likely to approve a borrower with a 720 FICO score and a 20% down payment as they were before the housing crisis. With only a 10% down payment, 77% of the loan officers said they’d still approve the borrower. And if your FICO score’s 680? Only a few of those loan officers would be less likely to approve your loan than they were in 2006.
Even if your score’s lower that 680 or you don’t have a 20% down payment, you still have options. The U.S. Department of Housing and Urban Development sets the minimum FICO score at 580 with a 3.5% down payment for borrowers to qualify for an FHA loan, but many lenders won’t approve borrowers with less than a 620 credit score.