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Category: Rates

Learn more about Memphis real estate.

How to Buy Down Your Mortgage Rate: A Guide for Potential Homebuyers

October 6, 2024

As you explore mortgage options to finance your new home, you may come across the concept of a “rate buy-down.” This is a valuable strategy that allows you to secure a lower mortgage interest rate, which can lead to significant savings over the life of your loan. In this article, we’ll walk you through what a rate buy-down is, the potential benefits and challenges, and how it could apply in a real-world scenario for a $500,000 home. What Is a Rate Buy-Down? A rate buy-down, also known as a mortgage discount point, involves paying an upfront fee to reduce your interest rate. Essentially, you are prepaying some of the interest costs to lower your monthly mortgage payments. This process can be particularly helpful in high-interest rate environments, making homeownership more affordable over time. Rate buy-downs are often discussed in terms of “points,” where one point equals 1% of the loan amount. Each point you purchase lowers your interest rate by a certain percentage, generally between 0.125% and 0.25% per point, though the exact rate reduction can vary depending on the lender and market conditions. How Does It Work? Here’s a quick breakdown: Determine the Loan Amount: To figure out how

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Falling Mortgage Rates Are Bringing Buyers Back

September 19, 2024

If you’ve been hesitant to list your house because you’re worried no one’s buying, here’s your sign it may be time to talk with an agent. After months of high rates keeping buyers on the sidelines, things are starting to shift. Rates are already coming down due to a number of economic factors. And yesterday the Federal Reserve cut the Federal Funds Rate for the first time since they began raising that rate in March 2022. And while they don’t control mortgage rates, this sets the stage for mortgage rates to fall even further than they already have – especially since more cuts from the Fed are expected into next year. And lower mortgage rates are bringing more buyers back into the market. Lisa Sturtevant, Chief Economist at Bright MLS, says: “A drop in the cost of borrowing will help fuel more homebuyer demand . . . Falling rates will also bring more sellers into the market.” The best part? You can take advantage of that renewed buyer interest. As Rates Fall, Buyer Activity Goes Up The graph below illustrates the relationship between falling mortgage rates and rising buyer activity. The orange line represents the average 30-year fixed mortgage rate,

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How the Economy Impacts Mortgage Rates

August 1, 2024

As someone who’s thinking about buying or selling a home, you’re probably paying close attention to mortgage rates – and wondering what’s ahead. One thing that can affect mortgage rates is the Federal Funds Rate, which influences how much it costs banks to borrow money from each other. While the Federal Reserve (the Fed) doesn’t directly control mortgage rates, they do control the Federal Funds Rate. The relationship between the two is why people have been watching closely to see when the Fed might lower the Federal Funds Rate. Whenever they do, that’ll put downward pressure on mortgage rates. The Fed meets next week, and three of the most important metrics they’ll look at as they make their decision are: The Rate of Inflation How Many Jobs the Economy Is Adding The Unemployment Rate   Here’s the latest data on all three. 1. The Rate of Inflation You’ve probably heard a lot about inflation over the past year or two – and you’ve likely felt it whenever you’ve gone to buy just about anything. That’s because high inflation means prices have been going up quickly. The Fed has stated its goal is to get the rate of inflation back down

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Tracking Mortgage Rates with Professional Support

May 6, 2024

If you’re thinking about buying a home, chances are you’ve got mortgage rates on your mind. You’ve heard about how they impact how much you can afford in your monthly mortgage payment, and you want to make sure you’re factoring that in as you plan your move. The problem is, with all the headlines in the news about rates lately, it can be a bit overwhelming to sort through. Here’s a quick rundown of what you really need to know.   The Latest on Mortgage Rates Rates have been volatile – that means they’re bouncing around a bit. And, you may be wondering, why? The answer is complicated because rates are affected by so many factors. Things like what’s happening in the broader economy and the job market, the current inflation rate, decisions made by the Federal Reserve, and a whole lot more have an impact. Lately, all of those factors have come into play, and it’s caused the volatility we’ve seen. As Odeta Kushi, Deputy Chief Economist at First American, explains: “Ongoing inflation deceleration, a slowing economy and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may

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What Mortgage Rate Do You Need To Move?

March 15, 2024

If you’ve been thinking about buying a home, mortgage rates are probably top of mind for you. They may even be why you’ve put your plans on hold for now. When rates climbed near 8% last year, some buyers found the numbers just didn’t make sense for their budget anymore. That may be the case for you too. Data from Bright MLS shows the top reason buyers delayed their plans to move is due to high mortgage rates. In fact, 72.1% of buyers said they paused their decision to move because of mortgage rates, 34.4% of buyers said inventory, and 17.4% said affordability and home prices were the reason they haven’t purchased a home.     David Childers, CEO at Keeping Current Matters, speaks to this statistic in the recent How’s The Market podcast: “Three quarters of buyers said ‘we’re out’ due to mortgage rates. Here’s what I know going forward. That will change in 2024.” That’s because mortgage rates have come down off their peak last October. And while there’s still day-to-day volatility in rates, the longer-term projections show rates should continue to drop this year, as long as inflation gets under control. Experts even say we could see

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Are More Homeowners Selling as Mortgage Rates Come Down?

January 29, 2024

If you’re looking to buy a home, the recent downward trend in mortgage rates is good news because it helps with affordability. But there’s another way this benefits you – it may inspire more homeowners to put their houses up for sale. The Mortgage Rate Lock-In Effect Over the past year, one factor that’s really limited the options for your move is how few homes were on the market. That’s because many homeowners chose to delay their plans to sell once mortgage rates went up. An article from Freddie Mac explains: “The lack of housing supply was partly driven by the rate lock-in effect. . . . With higher rates, the incentive for existing homeowners to list their property and move to a new house has greatly diminished, leaving them rate locked.” These homeowners decided to stay put and keep their current lower mortgage rate, rather than move and take on a higher one on their next home. Early Signs Show Those Homeowners Are Ready To Move Again According to the latest data from Realtor.com, there were more homeowners putting their houses up for sale, known in the industry as new listings, in December 2023 compared to December 2022 (see

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This information is deemed reliable but not guaranteed. Please contact Meridian Premier Homes to learn more about what properties are for sale and for current real estate information. Equal Housing Opportunity: Equal Opportunity Employer. It is illegal to discriminate against any person because of race, color, religion, sex, handicap, familial status, or national origin.We are committed to making this website compliant with the Americans with Disabilities Act. We wish all of our visitors to be able to easily access our services. Accessibility and usability are not always possible in every area of the website or for those visitors using assistive technologies and devices. If, at any time, you have specific questions or concerns about the accessibility of any particular page, please contact us. Meridian Premier Homes. Privacy Policy.

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