Business Portal for those who wish to invest or live in Florida

English EN Portuguese PT Spanish ES


WhatsApp businesses for sale in Miami


+1 (786) 616-3481

Business Portal for those who wish to invest or live in Florida

English EN Portuguese PT Spanish ES

High mortgage rates send homebuyers seeking relief – Miami Diario

High mortgage rates are more than double what they were a year ago, so homebuyers are looking for ways to put off some of the pain for a while.

READ MORE – These are the people eligible to receive financial aid from Miami-Dade

The trend has pushed adjustable-rate mortgages, or ARMs, to their highest usage in more than a decade.

The Mortgage Bankers Association recently showed that ARMs accounted for 12,8% of all home loan applications in the week ending October 14.
The last time these loans accounted for a higher proportion of all mortgage applications was during the first week of March 2008.
Also, starting this 2022, ARMs only accounted for just 3,1% of all mortgage applications, where the average rate on a 30-year fixed-rate mortgage was 3,22%, while last month that rate topped 7%, the highest since 2002, reported Local 10.
For its part, this week the average rate on a 30-year mortgage fell to 6,58%, according to mortgage buyer Freddie Mac. A year ago, it was 3,1%.
Federal Reserve
The Federal Reserve raised its short-term rate in an attempt to squash the highest inflation in decades, which has also influenced the rapidly rising mortgage rates on the 10-year Treasury note yield, which rose in the middle of expectations of higher interest rates in general.
This adds hundreds of dollars to monthly mortgage payments, which is a significant hurdle for many potential homebuyers. This translates into the fall in housing this year.
Last month, sales of previously occupied US homes fell for the ninth straight month. Annual sales are running at their pre-pandemic pace, but slower than 10 years ago.
mortgage rates
For home seekers who can still afford a home at today's high mortgage rates, lowering their monthly payments with an adjustable rate loan for the first few years can help give them financial flexibility.
For example, a home buyer who takes out a typical 5/1 ARM will have a low fixed rate for the first five years of the loan. After that, the loan changes to an adjustable interest rate, which can be higher or lower until the debt is paid off or the buyer refinances the loan.
Another approach that has become popular recently is to buy down the interest rate on a 30-year fixed-rate loan for the first two to three years.
Real-estate market
Lowering the interest rate on a 30-year mortgage can make monthly payments more manageable, something both homebuilders and homeowners offer to entice buyers as the housing market slows.
Let's say a borrower takes out a 30-year mortgage with a 6% fixed rate. With what's known as a 3-2-1 rate reduction, that homebuyer's interest rate would be 3% for the first year of the loan, 4% for the second, and 5% for the third. This would save you thousands of dollars down the road.
However, the borrower must still qualify for the full monthly payment before the purchase adjustment.

High mortgage rates send homebuyers scrambling for relief
— WPLG Local 10 News (@WPLGLocal10) November 23, 2022

More on this topic

Miami Daily
Author: Monica Munoz 4:41 pm

Pin It on Pinterest

Share This
× How can I help you?

We find the business for you

Please fill out this form