30-year mortgage rate falls to its lowest level in nearly three years

Economic uncertainty drove mortgage rates down, according to Freddie Mac data released Thursday, with the popular 30-year reaching its lowest level in nearly three years.

The 30-year fixed-rate average fell to 3.55 percent from 3.60 percent — the lowest since November 2016 — with an average 0.5 point. (Points are fees — equivalent to 1 percent of the loan amount — paid to a lender on top of the interest rate.) It averaged 4.51 percent a year ago.

Ronald Dwyer / Realtor

The 15-year fixed-rate average fell to 3.03 percent from 3.07 percent with an average 0.5 point. It averaged 3.98 percent a year ago. The five-year adjustable rate average decreased to 3.32 percent from 3.35 percent with 

"The drop in interest rates to a 3 year low, is fantastic news for buyers since lower mortgage rates make buying much more affordable," said Ronald Dwyer, a veteran Realtor with DwyerProperties.com powered by 3DX Real Estate. "Home prices have gone up anywhere from three percent to 6 percent and some areas higher in the past year in the Metro Detroit area, so these lower interest rates really help new home buyers  Now is the time to buy!"

Cheat The System, How To Pay Your Mortgage Off Early

New data shows that nearly 40 percent of all homes in the United States are owned free and clear, with “the highest share” in West Virginia at 54%,” reported Bloomberg.com “Maryland and the District of Columbia were on the other end of the spectrum with rates of 27% and 24%, respectively.”

When many a real estate dream is focused on the idea of buying a home and staying just long enough to earn enough equity to move up to something bigger and better, this may come as somewhat of a surprise. If you have considered the idea of buying a forever home (or if you’re already there!) and want to be amongst the almost 40 percent of owners living mortgage free, there are some tips that can help you move toward that zero balance.

Switch to biweekly payments
Say your mortgage payment is $2,000. Pay it once per month, and you’re paying $24,000 per year. Switch to biweekly payments of $1,000 every two weeks, and you end up paying $26,000 for the year. That adds up.

“This will have the nearly the same impact on your budget as one monthly payment, but because there are 52 weeks in a year, a biweekly payment schedule will result in 13 full-sized payments a year instead of the normal 12,” said The Motley Fool. You'll be making an entire extra payment every year without having to scrounge around for the extra money. To look at some real-life numbers, if you have a 30-year $200,000 mortgage at an interest rate of 5%, making biweekly instead of monthly payments would save you $34,328 in interest and allow you to pay off the loan almost five years early.”

Make extra principal payments
Especially in the early years of your mortgage, your payments are likely to be mostly interest. But you can eat away at your principal by making an extra "principal only" payment. “The benefit of paying additional principal on a mortgage isn’t just in reducing the monthly interest expense a tiny bit at a time,” said Bankrate. “It comes from paying down your outstanding loan balance with additional mortgage principal payments, which slashes the total interest you’ll owe over the life of the loan.”

Let’s use their example of a $120,000 mortgage at a 4.5 percent interest rate, with monthly principal and interest of $608.02. Pay an extra $25 principal payment every month and you can save more than $9,000 in interest over the life of the loan.

You’ll want to make sure you’re allowed to make these extra principal payments per the terms of your loan, however. “Check with your mortgage company first,” said Dave Ramsey. “Some companies only accept extra payments at specific times or may charge prepayment penalties.”

Refinance into a shorter-term loan
Can you swing a higher monthly payment? Refinancing out of a 30-year mortgage to a 15-term can save you an enormous amount of money. “A mortgage amount of $250,000 over 30 years at a rate of 4% would cost $429,674 in principal and interest payments by the end of the term,” said Investopedia. “The total interest would be $179,674 for borrowing for 30 years. The same loan amount and interest rate over 15 years would cost $332,860 by the end of the term. Total interest would be $82,860 for borrowing for 15 years. At 4%, you'd pay only about 46% of the total interest for a 15-year than you'd pay for the 30-year.”

There is a secondary benefit to refinancing to a shorter term; these rates are typically lower. At press time, Wells Fargo’s 30-year fixed mortgage rate was 3.875%, while the 15-year fixed rate was 3.125%.

Make small sacrifices
“Other small sacrifices can go a long way to help pay off your mortgage early,” said Dave Ramsey. “How much could you save if you took your Starbucks money and added it to your mortgage payment each month? According to the Acorns Money Matters Report, the average American spends $3 per day on their coffee. That’s around $90 a month added to your mortgage payments—which will save you $25,000 in interest and four years on the life of your loan!”

7 Tips for Buying Your First Home in the U.S.

Nothing says you’re truly an American like owning a home. And just over half of all foreign-born households living in the U.S. own their own home.

If you’re ready to join them, try these seven tips for American-style homebuying success — the process here may be quite different from what you’re used to.

1. Be Ready to Prove Who You Are
You don’t have to get your citizenship, a green card, or any particular type of visa before you buy a home. But you do need:

An Individual Taxpayer Identification Number. That’s a number assigned by the Internal Revenue Service to foreign nationals who need to file income tax returns.
A valid foreign passport, or two or more current photo identifications, such as a driver’s license, to show who you are.

Although property ownership isn’t tied to immigration or visa status, there are rules about how long you can stay, so if you’re not a citizen, check out U.S. visa requirements before you purchase.   

2. Plan to Get a Mortgage
That way, you don’t have to save your money for years to become a homeowner and start building equity. The U.S. home loan market offers many safe, affordable mortgages, including ones that allow Muslims to buy a home without violating Islamic laws against paying interest. 

To get a U.S. mortgage, you must establish credit and earn a good credit score. To boost your score:

Open U.S. bank and credit card accounts.
Report all your income on your tax returns. Lenders use tax returns to verify your income and decide how much you can afford to borrow to buy a home.

When it’s time to apply for a mortgage, you’ll find major banks with global operations have experience working with foreign buyers and tend to have a process for verifying credit established in other countries.

3. Work with a experienced Realtor. 
Make sure your REALTOR®  has experience, training, and education in helping foreign-born home buyers. An experienced real estate or title attorney can help you protect your interests, too.

Tell your real estate agent how the home buying process works in your native country and ask her to explain U.S. home-buying customs to identify any differences. Even within the U.S., local differences exist in how people buy and sell homes. Knowing how homes are sold here and what to expect with closing costs, inspections, and the negotiation process reduces your stress and helps you get a good deal on your first home.

4. Don’t Be Shocked By Casual Attitudes
Americans’ casual attitudes toward buying or selling real estate is a byproduct of the relaxed U.S. business culture. Although real estate contracts must be in writing, the process leading up to the sales contract signing may be more informal and casual than it would be in your home country.

5. Convert Units
Learn to convert from the U.S. standard measurement into metric, or pick up a metric converter app so you can better estimate room and home sizes while shopping.

6. Find Someone Who Can Translate
If you’re not fluent in English, or prefer speaking in your native language, choose inspectors, mortgage bankers, and REALTORS® fluent in your own language. Dwyer Properties has staff that speak English and Arabic.  Although it’s possible to get translated copies of standard real estate documents, you’ll likely have to sign the English versions during your home purchase.

7. Create a Financial Plan for Your Home
Consider all the real-estate related expenses you’ll have as a homeowner, including property taxes, homeowners insurance, and maintenance costs. Set up a financial plan for your home so you know how much money to set aside for ongoing expenses.

Do 46 Million Millennials Know They Are Mortgage Ready?

Many have written about the millennial generation and whether or not they, as a whole, believe in homeownership as part of attaining the American Dream.

Millennials have taken longer to obtain traditional milestones than the generations before them, such as getting married, having kids, and buying a home. However, that does not mean that they do not still aspire to achieve those things.

History shows that people tend to buy their first home around age 30. Nearly 5 million millennials will turn 30 in the next two years. This will continue to fuel demand for housing.

This is also one of the many reasons why the millennial homeownership rate has continued to grow over the past few years. 48.4% of Americans between the ages of 30-34 now own a home.

There are over 46 million millennials (33% of the generation) who are considered “Mortgage Ready”, meaning they meet the qualifications to be approved for a mortgage today!

• a FICO Score ≥ 620
• a Back-End Debt to Income Ratio ≤ 25%
• no Foreclosures or Bankruptcies in the last 7 years
• no severe delinquencies in 1 year

Rob Chrane, CEO of Down Payment Resource, commented on the findings of the report,

“We now know there are millions of buyers with the income & credit necessary to qualify to buy a home. The biggest question is:

Do they know it? …Unfortunately, many renters don’t investigate homeownership simply because they don’t believe it’s an option.”

The good news is that more and more millennials are realizing that they can afford a home now. Even so, more can be done to increase awareness of low down payment programs to attract even more of this generation.

New data from realtor.com shows that in December, millennials accounted for 42% of all new home loans originated in the month. This is more than any other generation.

Bottom Line
If you are one of the many millennials who may be “Mortgage Ready” but are unsure what your next steps should be, let’s get together to help guide you on your path to homeownership!

Do you know how to properly sell your house fast?

In today’s real estate market, with more houses coming to market every day and eager buyers searching for their dream home, setting the right price for your house is one of the most important things you can do.

According to CoreLogic’s latest Home Price Index, home values have risen at over 6% a year over the past two years, but have started to slow to 4.4% over the last 12 months. By this time next year, CoreLogic predicts that home values will be 4.6% higher.

With prices slowing from their previous pace, homeowners must realize that pricing their homes a little OVER market value to leave room for negotiation will actually dramatically decrease the number of buyers who will see their listing! (see the chart below)

Bottom Line


If you are debating listing your house for sale, let’s get together to discuss how to price your home appropriately for our area and maximize your exposure this Spring Market!

Don't Let Your Luck Run Out, Make Your Move This Spring

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