I know I mentioned this last week, but it really is worth noting another time that interest rates here in DFW are at record lows. So, actually how low are we talking? Well, some people are claiming that this is the lowest we've seen rates in over 30 years. That's right, 30 years. To top it off, just last month home sales went up almost 8%, and the average home price also increased in the amount of 4% from last year. Obviously this change is being driven by something, but what exactly is it?
CONTRIBUTING FACTORS TO HOME SALES
The most obvious answer to this question would be the ever popular $8000 tax credit, which actually expired earlier this year. Experts agree that this credit pushed first time homebuyers into purchasing a home before the credit was gone. In order to qualify, buyers had to sign their real estate contracts by April 30 -- and they still have to close on their home by the end of this month, June 30th. So we could still see figures rise as we reach the full expiration of the tax credit.
CONTRIBUTING FACTORS TO LOW INTEREST RATES IN DALLAS-FORT WORTH
Would you believe that the financial status of Europe would have an effect on your interest rate? Well it does, as surprising as that may seem. Experts claim that the overall financial ailment in Europe is actually providing unexpected benefits to the United States economy, as foreign investors are putting more of their money into our Treasury Bonds (which are historically a safe haven when it comes to investing). Long story short, treasury bonds are directly related to mortgage interest rates, and this burgeoning demand has driven up the price of bonds, and inversely, interest rates.
WHAT DOES ALL THIS MEAN FOR YOU?
Overall, this means that if your interest rate is over 6% it might be a good time to refinance your loan and get a lower payment. This can save you a substantial amount of money over the long run. The easiest way to find out if a refinance would benefit you is to determine what is known as the "BREAK EVEN POINT."
HOW TO DETERMINE YOUR BREAK EVEN POINT
The easiest way to find out if you should refinance is to take your closing costs (everything you need to pay to actually do the refinance) and divide it by amount of money you will be saving each month with your new lower payment. The end result of this will represent the number of months you will need to stay living in your home in order for the refinancing to make sense financially. If it takes you 5 years to make up the savings, but you don't plan on living there more than 3, then the refinance doesn't make sense, and vice-versa!
If you would like us to do a FREE BREAK EVEN ANALYSIS don't hesitate to CONTACT US and we will get back to you as soon as possible.
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