It's pretty much a foregone conclusion that Columbia SC mortgage rates have already hit their all-time low when the benchmark 30-year fixed rate was 3.31 percent in November 2012.
Columbia SC home buyers won't see that level again. But the point the folks at Freddie Mac are making is this: Columbia SC mortgage rates right now remain historically low. Remember the 1980s and 18 percent?
Columbia SC mortgage rates have remained right at or below 4.5 percent for weeks now.
Columbia SC Mortgage Rates in Comparison
One thing seems certain: we aren't likely to see average 30-year fixed mortgage rates return to the historic lows experienced in 2012.
Had a borrower purchased a home a year ago, he or she would be paying about $90 less in interest a month, or about $1,080 a year.
But Freddie Mac takes the long view for a better perspective.
During the 1970s, the average 30-year rate was 8.86 percent. That average surged to 12.7 percent in the gloomy real estate days of the 1980s.
The all-time record high occurred in October of 1981, hitting 18.63%. That's more than four times higher than today's average 30-year fixed rate of 4.51% as of last week.
So as you can see, Columbia SC mortgage rates today still make now one of the best times to buy a home in the last 40+ years.
Check out our other articles and news affecting Columbia SC mortgage rates by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
When it comes to Columbia SC mortgages, it appears that adjustable rate loans are becoming more popular once again.
Adjustable-rate mortgages, whose rates can jump after a few years, are believed to have been one of the biggest culprits of the housing crisis. However, banks say they are concentrating on making the loans to buyers with strong credit who are looking for larger loans — not to "sub-prime" buyers who took out loans they could barely afford.
A report in the Wall Street Journal says ARM's comprised 31 percent of mortgages in the $417,001-to-$1 million range in the fourth quarter of 2013, up from 22 percent a year earlier. ARMs made up 61 percent of mortgages of more than $1 million.
More Columbia SC Mortgages Shifting to ARM's
It would seem that more and more Columbia SC mortgages are shifting to the ARM's, especially among first time homebuyers looking to get out of the rental market.
As fixed rate Columbia SC mortgages continue to increase, it is expected that more and more borrowers will look at adjustable rate mortgages to keep payments lower.
It is expected that 2014 is going to be the year of the first-time homebuyer, and keeping mortgage payments as low as possible is one driving factor that seems to be creating all the renewed interest in ARM's.
While rates on Columbia SC mortgages have continued to slowly rise over the past few weeks, they still remain affordable and many first-time buyers say they still plan to make a home purchase this year.
Get more news about Columbia SC mortgages and news that affects mortgage rates by clicking the Columbia SC Real Estate News link to your right under Columbia SC Real Estate Categories.
Columbia SC home buyers need to be sure they'll qualify for a mortgage before they sign on the dotted line to buy that home of their dreams.
Qualifying for a mortgage alone is not enough these days. Columbia SC home buyers also need to know they are getting the best possible rate they can, as well as shop around for closing costs, because these can vary from lender to lender.
5 Mortgage Tips for All Columbia SC Home Buyers
1 – Document Your Finances. Columbia SC home buyers should be prepared for extra scrutiny by lenders when qualifying for a mortgage due to new mortgage regulations that went into effect in January, especially the new rules that prove borrowers' ability to repay their loans. You should be prepared to show bank statements, tax returns, W-2s, investment accounts, and documentation of any other assets you own. You should also be prepared to explain any sizable deposits to your bank account—even a $500 check from a family member for Christmas. If you can't prove where the money came from, it can delay your closing.
2 – Lock In Your Rate As Soon As Possible. Mortgage rates are expected to rise in 2014 as the Federal Reserve continues to phase out its $85 billion per month bond-buying stimulus program. A rate lock is usually good for 30, 45, or 60 days, although that time period can vary among lenders.
3 – Know Your Credit Score. The best mortgage rates go to Columbia SC home buyers with credit scores of 720 or higher. While those with a credit score of 680 can still likely qualify for a loan, you may end up paying a higher rate or more closing costs.
4 – Shop Lenders. Columbia SC home buyers may have the upper hand in 2014. Lenders have lost a huge amount of their refinance business as rising rates discourage home owners from refinancing. Columbia SC home buyers are the beneficiaries of the refinancing cutbacks, as lenders become more willing to compete for your business. Columbia SC home buyers need to shop around for more than just the best interest rate on the loan, looking at points and closing costs as well.
5 – Watch What You Spend. Columbia SC home buyers need to refrain from going out and outfitting their new home with all new furniture—on credit—before closing on the home loan. Lenders will be carefully scrutinizing your debt obligations, such as credit cards and student loans. Borrowers are advised to keep their monthly debt obligations, including mortgage and property taxes, to below 43 percent of their income. And just because you have been approved for a loan doesn't mean the loan is guaranteed. It's customary for lenders to pull your credit report a second time, just before closing, to see if you have done anything to change the credit line they approved you on to begin with.
We post periodic updates about Columbia SC mortgage rates and the news that affects those rates at our Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
If paying off your Columbia SC home mortgage is a goal of yours, consider whether your individual circumstances make doing so a smart move or not.
The rules have changed with the advent of historically low interest rates and the urgency to pay off your mortgage has somewhat diminished as interest rates have plummeted to historical lows. It is not the black-and-white decision it once was when interest rates hovered between 6 percent and 9 percent, and even the 11 percent to 13 percent we saw a couple of decades ago.
Things to Consider Before Paying Down Your Columbia SC Home Mortgage
Rather than just paying off your Columbia SC home mortgage, here are some places you might want to consider putting your extra money first.
Take your cards off the table: Pay off credit cards with any high interest rates — especially today, as there is now a huge discrepancy between credit cards interest rates of 13 percent to 24 percent and a 3 or 4 percent mortgage interest rate.
In case of emergency: You should first build up an emergency fund. Most financial planners recommend nine months to one year of living expenses. Yes, today's job market is improving; however, if you suddenly find yourself facing a layoff, you need to be prepared to sustain one year of living expenses.
Build up for retirement: Are you able to make the maximum yearly contributions to your retirement accounts? 401(k), IRA or an equivalent? Ask you accountant what the maximum allowable is for you and go for it.
Get the kids to school: Think about the kids, their schools and their college funds. Depending on how many children you have, how old they are and what type of college enrollment expectations they have, you need to be making adequate contributions to those 529 plans or other college savings accounts.
You may live a long time: Your money could run out before your health runs down. Another priority investment you should consider making each year is toward long-term health-care insurance. It is not as costly when you start it in your 30s or 40s. But if you didn't get around to it till your 50s it will take a hit out of you budget each month.
Best Method to Pay Down Your Columbia SC Home Mortgage
Pay an extra bump: On Jan. 1 or Dec. 31, write an extra mortgage payment check to the bank. Send it in as additional principal, and the bank will credit your account. After a few of these payments, you will really begin to see the portion of your monthly mortgage payment that is interest begin to shrink and the portion of your payment that goes to principle begin to grow.
Stash the cash: Before you go out and treat yourself to that new suit or to the spa retreat weekend, deliver your tax refund or your annual bonus directly to your mortgage principal.
Go monthly: Add an extra one-twelfth of your Columbia SC home mortgage payment to each monthly payment. Or if you can afford it, add even more extra every month.
Don't pay the bank even more: Banks love to send out notices telling you how much money you will save by allowing them to make twice monthly payments for half your mortgage amount rather than the one monthly payment. They will graciously offer to do this for you with a one time set up fee and then a small monthly processing fee. Do you think the banks offer this because they love you? Of course not, it's because they make money on this. Pay extra on your own, via any of the methods described above. The bank is getting enough of your money already.
For more Columbia SC mortgage tips, visit our Columbia SC Mortgage Info link under our Columbia SC Real Estate Categories to the right.
Columbia SC mortgage rates will go up in 2014. At least that's what just about every housing and mortgage analyst has been saying for several months now, and is still saying.
The Fed announced recently that it would extend the so-called taper and cut its bond-buying by another $10 billion, to $65 billion.
And yet for the past month, Columbia SC mortgage rates have not really moved. If anything, they've moved slightly lower from their year-end level and now hover just above 4.50 percent for the 30-year fixed. That has some scratching their heads about where rates will move as we head into the usually busy spring housing market.
Why Columbia SC Mortgage Rates Are Holding Steady
The reason: As the stock market falls, investors head to the safety of quality assets such as bonds. Recent economic turmoil overseas has added to that movement and, consequently, to a rebound in Treasury-buying, which depresses yields. Columbia SC mortgage rates generally follow the 10-year yield.
So will Columbia SC mortgage rates really rise in 2014? Probably, but not entirely because of the Fed's moves or more mortgage regulation. Despite a new regime at the Fed, policy will still depend largely on the employment picture.
"What Janet Yellen will do in March will depend on a few more jobs numbers and a clearer view of how markets deal with the current reality of less QE [quantitative easing]," according to Peter Boockvar, an analyst with the Lindsey Group.
Columbia SC mortgage rates will rise because interest rates always increase with an improving economy and a strong stock market, which appears to be the current trajectory, though they likely will rise more slowly than some have predicted.
For more on Columbia SC mortgage rates and the news that affects those rates, visit our Columbia SC Mortgage Info section of articles under Columbia SC Real Estate Categories to your right.