Buying a house is exciting! Everyone loves taking a look at different homes and exploring potential neighborhoods, however there are a bunch of other not so exciting things that come along with buying a home. Writing offers, inspections, and mortgages are some of the less enthralling parts of the home buying process. This is very unfortunate, because when it comes down to brass tacks, they are some of the most important components of the home buying process!
Quite possibly the most important piece of the home buying process is, of course, the mortgage. After all, it’s a little difficult to buy a house if you don’t have the money to do so! If you’re shopping around for a mortgage right now, you’re in luck, because mortgage rates are incredibly low right now. We’re actually seeing some of the lowest mortgage rates we’ve ever seen!
Why’s this? It’s because of a little thing known as the federal funds rate. You’ve probably heard it mentioned on the news, but do you know what it actually is? The federal funds rate is essentially the interest rate at which banks lend money to each other. Right now the federal funds rate is incredibly low (it’s actually 0.25% at the time this article is being written). What’s great about the federal funds rate being low is since banks are saving money on their loans to each other, they’re able to pass that savings onto us consumers! So a low federal funds rate means low interest rates on consumer loans, like mortgages.
Quick Tip: Although the federal funds rate doesn’t change very often, mortgage rates do. Most people don’t know this, but mortgage rates change each and every day. Click here if you want to find out what today’s rates are and compare current mortgage rates.