With the housing market now fully recovered from the recent economic downturn, interest rates on mortgages are at near historic lows. A 15-year fixed rate mortgage for someone with good credit can be obtained at a rate as low as 3.2 percent. With such a low interest mortgage, people who take advantage of these rates will have more money left over in their budget each month to put toward savings or refinancing their homes. They do not have to scramble to pay off their mortgage early in a bid to save money.
However, the low interest rates on mortgage may not be an open invitation for everyone to buy a home today. People who are trying to decide whether to rent or buy should consider factors that could undermine their homebuying efforts. For example, they should consider whether or not they have enough money saved for financial crises such as being sick and unable to bring in an income to pay bills. Without proper savings, they could jeopardize their mortgage as they struggle to stay on top of other bills.
People who do have money set aside for emergencies and believe that they are ready to buy a home should act quickly before the rates increase again. Economic forecasters admit that the stock market has been remarkably stable, contributing to the low interest rates on mortgages. However, as with any normal economic cycle, rates will inevitably rise again. Buying a home now while interest is low can be in people’s best interests.