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How The Recent Drop In Mortgage Rates Affects You
This is a welcome bit of relief:
Over the past two months, mortgage rates, which had been climbing steadily for over a year, started to trend down.
In fact, the 30-year fixed mortgage rate has dropped to around 4.45% from a high of 4.94%. For reference, that's the lowest level since April of last year.
What's behind this welcome change?
Well, there's been a lot of volatility in the stock market since November. This pushes investors into more predictable investments, such as bonds. And this, in turn, pushes bond rates down.
Mortgage rates tend to follow bond rates pretty closely, and that's why we're seeing the 0.5% drop in mortgage rates since last November.
This is certainly good news for the real estate market as a whole, but how does it affect you in particular?
Well, if you're looking to buy, it makes it a lot easier to afford a loan.
Imagine, for example, that you wanted to take out a 30-year mortgage for $200,000.
The current 0.5% drop in mortgage rates would mean you'd be paying around $100 less each month.
And over the lifetime of the mortgage, you would pay around $20,000 ... more
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