It’s likely no news to you that mortgage rates are at a historic lows. As of this writing, Bankrate.com shows a 30 year fixed loan at 4.59%. Rates have only been lower twice in the last 25 years and both times have been within the last 2 weeks.
While rates are at a historic low, it’s good to keep in mind that only one year ago rates were a full point higher at 5.58%. This shows how quickly things can change.
In home construction this is important because typically, unless you pay extra to have your rate locked at the start of construction, the rate of your final mortgage will be determined after your construction loan converts into your 30 year fixed loan. From the time you order a home to the time it’s completed and your 30 year loan begins could be 6 months, or longer in some counties such as King. (For more information on how construction loans work, click here.)
To illustrate the value to you, if you have a loan of $200,000 (the average loan for a True Built Home for land, site development and a 2100 sq. ft home) here is an idea of what your monthly payments will look like:
As you can see, only 1 year ago your payment would have been $122 higher than today. Where will rates be one year from now? It’s difficult to say. Rates could go down, or they could go back up. If you’re not a gambler, then we urge you to consider ordering your home now to make sure you benefit from the lowest rates ever. Contact us to set up an appointment for a free, no obligation new home cost estimate. We look forward to hearing from you soon!