I have been scanning the news lately and have read several articles about the housing market during this pandemic. To most analysts’ surprise, the housing market has been booming.  

According to the latest data the fixed interest rates for a 30-year mortgage is at an all-time low of 3.13 percent compared to last month which was 3.15 percent.  This is the fourth time the 30-year fixed rate has fallen to a new low in the past couple of months.  The 15-year fixed rate average fell to 2.58 percent compared to 2.62 percent last week.  

Record-low mortgage rates and delayed demand from earlier this spring are encouraging prospective buyers to begin their home search and the refinance market is just as active.  This brings me to the fact that as a potential homeowner or a homeowner wanting to refinance a current mortgage, you need to know your numbers.  

The first number you should know is the mortgage payment you can afford.  This is an important first number because it’s the one number that probably won’t change during the home buying process. The mortgage a potential homeowner can afford is based on their income at the time of purchase.  Going above that payment amount could lead to a strain on the monthly budget and other financial issues.  

Secondly, you should be aware of the current mortgage interest rate.  Higher mortgage rates can mean higher mortgage payment amounts whether the price of the house goes up or down.  As HUD certified counselors, we can work with potential homeowners to assist them with determining how to know when they are getting the best offer by educating them about the pros and cons of different mortgage products.  

The third number you should know is your credit score.  Knowing your credit score can help you to determine when you need to apply for the home loan and it also determines the interest rate of your loan.  If your credit score is below the threshold, the loan will cost more or you may not qualify for a loan at all.  

Lastly, you should know how much money you have set aside for a down payment or for your closing cost. Saving the money for those costs can take some time, especially if you have to come up with thousands of dollars at once.  If you have not saved any money beforehand, one way to tackle that problem is to access down payment or closing cost assistance programs.  

There are several organizations that offer that kind of help to a potential homeowner.  You can always contact a HUD-approved counseling agency for help locating agencies that have those resources available.  If you have any other questions please email me at charlestien.harris@southernpartners.org

Just remember that knowing your numbers can help you navigate the road to homeownership and give you a better chance of getting that mortgage you have always wanted or it can make refinancing a current mortgage more accessible.

Until next week, stay financially fit!

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