If you were waiting for the right time to buy a home this is the perfect time! Interest Rates are the lowest they have been in some time. The strong and safe U.S. economy is proving that it will remain on a course of steady improvement as we see other markets such as Europe still struggle and the U.S. proves to be a better option for investors. The housing market is on strong footing with growth in sales with the best numbers on new home sales since 2008. 

Just as everyone was expecting mortgage rates to go up, they took another significant nose dive in the last week. Many people who have been considering a home purchase or to refinance must seriously consider those options. We have seen the average rates drop to 3.97 percent for FHA/VA and conventional programs. These are the lowest since June of 2013. In January the average rate reached above 4.5 percent. That means if somehow you failed to refinance your higher rate the last time the mortgage rates fell to this historic low, here is your chance again not to miss out on the savings which can be significant depending on your current rate.  Buyers are also looking at great opportunity to save on their home purchase now. In the past two weeks the drop in rates meant a savings of $115 on the monthly payments on a $400,000 and a payment drop by $230 per month since a year ago. Mortgage lenders are getting busy with rates this week being as low as 3.75 for some borrowers but the most prevalent quote is 4%.  

Fear from markets around the world are driving some panic in the stock market, so that money is moving into safer bets. Two of the safest and most liquid markets in the world are the U.S. Treasury Market and U.S. Mortgage Security market. As more money moves into these markets, rates go down as investors are willing to earn less return for the perceived safety.  The biggest potential for movement is mid-week when the Fed will likely put an end to QE3.  Market reaction to what the Fed does is never a guarantee but for now we have the potential for a lot of first time home owners to own the house of their dreams on a budget they can manage!  

Here are examples from our Mortgage calculator page of approximately what you are likely to pay now at 4% compared to what you may pay at 5%

4% interest rate on a 30 year loan with 5% down 5% interest rate on a 30 year loan with 5% down
Down Payment: $20,000.00
Amount Financed: $380,000.00
Monthly Payment: $1,814.18 (Principal & Interest ONLY)
  Since you are putting LESS than 20% down, you will need to pay PMI (Private Mortgage Insurance), which tends to be about $55 per month for every $100,000 financed (until you have paid off 20% of your loan).
This could add $209.00 to your monthly payment.
Monthly Payment: $2,023.18 (Principal & Interest, and PMI)
  Residential (or Property) Taxes are a little harder to figure out... the average residential tax rate seems to be around $14 per year for every $1,000 of your property's assessed value. Let's say that your property's assessed value is 85% of what you actually paid for it - $340,000.00. This would mean that your yearly residential taxes will be around $4,760.00.
This could add $396.67 to your monthly payment.
TOTAL Monthly Payment: $2,419.84 (including PMI and Residential Tax)
Down Payment: $20,000.00
Amount Financed: $380,000.00
Monthly Payment: $2,039.92 (Principal & Interest ONLY)
  Since you are putting LESS than 20% down, you will need to pay PMI (Private Mortgage Insurance), which tends to be about $55 per month for every $100,000 financed (until you have paid off 20% of your loan).
This could add $209.00 to your monthly payment.
Monthly Payment: $2,248.92 (Principal & Interest, and PMI)
  Residential (or Property) Taxes are a little harder to figure out... the average residential tax rate seems to be around $14 per year for every $1,000 of your property's assessed value. Let's say that your property's assessed value is 85% of what you actually paid for it - $340,000.00. This would mean that your yearly residential taxes will be around $4,760.00.
This could add $396.67 to your monthly payment.
TOTAL Monthly Payment: $2,645.59 (including PMI and Residential Tax)

A savings of $225 a month which is a great amount and equals over $81,000 of savings over the life of the loan.

If you have any real estate or area related questions or you're interested in buying or selling a home in Northern Virginia,  contact or call Cleo  1.703.609.7407 & put our team of Northern Virginia home experts to work for you!