Mortgage rates continue to sizzle at historically low levels and American borrowers are finding more ways to snap them up. Although a new home purchase is the obvious way to hop on the low rate train; borrowers have found that low interest rates are providing a platform to save money on monthly bills.
According to Freddie Mac’s recent survey, a 30 year fixed product averaged 4.24% with 0.8% in upfront loan fees. A 15 year product has even more borrowers salivating at 3.63% with 0.7% in fees.
And rates don’t appear to be going in an upward trend anytime soon. Thanks to the Federal Reserve’s ongoing purchase of U.S. Treasury bonds, the country will continue to maintain low loan rates. In fact the Fed recently reported that it plans to purchase $600 billion in Treasury bonds over the next eight months in an effort to stimulate market growth and drive more cash back into the economy.
Using Low Rates to Your Advantage
There are several ways borrowers can pounce on these low rates and use them to their advantage. Of course, topping the list is buying a home; however low rates aren’t restricted to first mortgages only. Here are some ways the average Joe can save money on monthly bills:
- Credit card balance transfer can kick that high rate to the curb. If you are still saddled with a 21% credit card rate it’s time to hop off that old horse and look for greener pastures. In fact many balance transfer offers provide you with interest free line of credit access for up to 21 months with only 3% in fees. Deals are even better than what was offered last year when you could get an interest free balance transfer deal for up to 12 months with 5% in fees.
- Save money when you refinance your auto loan. Refinancing that high rate auto loan can save you boat loads of cash. Use online tools to compare and contrast rates and terms to find the best auto loan for you. Vehicle owners can save hundreds of dollars in monthly payments with a click of a mouse.
- Mortgage refinance is like being a kid in a candy store. Remember the days when a 7% rate was considered to be “good.” If you are stuck in your outdated high rate mortgage now couldn’t be a better time to refinance. Before pursuing mortgage refinance, make sure you have at least 20% equity in your home. Also, check your credit report to make any corrections or updates to your credit score. Currently, lenders offer the best rates to borrowers with FICO scores of 720 or higher.
- Debt consolidation can lower your monthly payments. Scoop up your high interest auto loans, credit cards and other outstanding debt under one umbrella of debt consolidation. You benefit from making monthly payments on one low interest rate. Your best bet is to tap into a low interest home equity line of credit from your financial institution or rate shop local banks for a line of credit that makes sense.
- Invest in a second home. If you’ve dreamed of owning a second home or are ready to retire but not prepared to unload the family home; now may be the perfect time to add to your real estate portfolio.