It’s a headline we’ve seen dozens of times over the past few years and even more since the pandemic hit in March–mortgage rates in the U.S. have hit all-time record lows.
“We’ve been a broken record for a while, but this is as low as they’ve ever been and it’s been sustained,” Kevin Carlson, a Senior Mortgage Banker at Plains Commerce Bank said.
When the coronavirus first hit the market in March, mortgage rates were very volatile–briefly touching the current record low.
“It hit this level in March for about four hours and the whole country tried to refinance their house in those four hours,” Carlson said. “We basically broke the bond market and rates popped way back up after that.”
But for the past few weeks, mortgage rates have continually dropped lower and lower, now at well below three percent.
“Right now they’re in low two’s in some cases for 15 year loans and some government loans, and upper twos for 30 year fixed mortgages. Which we’ve never seen before,” Carlson said.
Right now many people who purchased or refinanced a home in the past few years may have a mortgage rate around 3.5 to 5 percent.
“A recently released statistic shows that three quarters of the people that have mortgages, have mortgages above 3.5 percent and could benefit from this,” Carlson said.
By refinancing and saving interest on their loan, homeowners can get a lower monthly payment, adding up to thousands in savings over the total life of the loan.
“We’re trying to grab as much cheap money off of the shelves as we can for people; I’ve doubled my staff in the past couple of months just trying to keep up.
The process involves a lot of paperwork along with fees to refinance for the lowest rate, but right now people may be able to refinance at no cost and still lock in a lower interest rate. It’s why Carlson says everyone paying a mortgage should at least look into it.
“We are identifying almost every client that we have should at least look at it,” Carlson said. “I think the timing is right, I think people can save a ton of money, or not, but look into it is the most important thing. Check into it, see what your options look like, but this is the time to look.”
The process to refinance is like re-doing all of the financial checks you did when you first purchased your home–looking at your income, W2s, bank account and more. But even if one member of your family has lost income due to the coronavirus, families may still qualify to refinance.