A mortgage can be defined as a loan that is taken to pay for a home. There are multiple components of this loan – like any loan – which include a principal amount, collateral, and an interest rate. The collateral is often the house itself – this means that if you fail to repay the loan, the bank has the right to be able to repossess your house, to get the amount back. The principal is the initial amount of the loan, and the interest rate is known as the mortgage rate. Mortgage rates are known to fluctuate with various factors, which include market interest rates, along with the borrower’s own credit score. Therefore, your own credit score – your history with loans, and whether you have any outstanding loans – can determine the mortgage rate you will get.
This year, the United States has experienced a lower rate of interest and lower mortgage rates. Because of a recession in the economy, the US government has tried to stimulate the economy by reducing mortgage rates, to encourage individuals to invest money into the market by buying homes. In one way, this is useful for potential buyers because this gives them more buying power. This year, the mortgage rate reduction was over 50 basis points, which means that monthly payments were cut by nearly 100,000 dollars in home prices. Another benefit to this is that the income needed to qualify for a mortgage loan is also reduced by a thousand dollars. Therefore, those with lower incomes will also be able to apply for a mortgage loan so that they will be able to own their own homes.
However, lower mortgage rates can be a sign of an unhealthy economy. Because of the decline of the mortgage rates, experts are concerned that this may be a sign of the global economy stagnating, or growing at a slower pace. This can result in consumers being wary about buying a house or entering the housing market.
Another con is that though these rates are lower in comparison to previous years, there are added fees and expenses that are incurred, which means that though the rate is low, you will still pay a significant amount.
Another con is that banks and insurance companies are affected – which can affect you as a consumer. Because insurance companies are negatively affected, they might charge higher rates to individuals, or may not be able to cater to all those who need insurance. Therefore, you may be able to own a home, but may not have insurance for your home.
Super Rates is a company that helps comply with the client’s needs by ensuing that lower mortgage rates can be achieved. This is done by creating easy access to low mortgage rate plans, and other mortgage products that will be able to help you eventually won your own home. Super Rates delivers on the goal of providing appropriate mortgage rates, lower than what banks will be able to offer. With a team of experts at hand, you will be able to ensure that you get the best mortgage rate the market has to offer.
