When you’re buying a home, price matters, but so does the cost of financing.
Mortgage rates took their biggest one-week drop in a decade last week.
Locally, the slide was three-eighths of a percentage point.
“You don’t typically see rates change that much over even a week or two unless something significant happens. I mean, that was rather dramatic to see that,” said 7/17 Mortgage Loan Consultant Aaron Frank.
Across the nation, the Mortgage Bankers Association said the mortgage application volume climbed 18.6% from the previous week. Mortgages to buy a home were 10% higher than a year ago.
“It definitely spurred some purchases, but along with the purchases, I mean, we see an uptick in the refinances as a result of that,” Frank said.
Refinance applications rose 39% to the highest level in three years.
The average 30-year fixed rate loan bottomed around 3.5% in the summer of 2016.
Rates were over 5% in November.
This interest rate drop makes it advantageous to consider refinancing.
“You’re probably going to see maybe a $20 to $25 difference in your $70,000 to $80,000 loan amounts. It’s a decent amount,” Frank said.
Every March, the Welcome Home Program (run by the Federal Home Loan Bank of Cincinnati) provides grants of $5,000 or $7,500 to assist with downpayment or closing costs, if you qualify.
Many local financial institutions can help you find out.
“So when you have that grant, coupled with the lower interest rates, you definitely see a pop in those purchases,” Frank said.
You can keep an eye on interest rates yourself, but many financial institutions also will do it automatically. You can sign up for notifications on adjustments to rates.