The Boston real estate market started off strong going into 2020. Before the COVID-19 pandemic hit, it was typically the best time of the year for sellers to list a downtown Boston condo for sale. However, with shutdowns and stay-at-home mandates, the housing inventory was never able to recover as buyers returned to the real estate market.
As Americans started to have more freedom and flexibility with remote working conditions, combined with low mortgage rates, real estate demand grew with limited supply — creating a lighting-fast seller’s market. The housing market out-performed every other economic sector across the nation.
With mortgage rates at all-time lows, it might feel like the best time to buy a second home but it won’t be as simple as you may think.
Before you start shopping for a second home, first consider refinancing your current home mortgage. With the current lower interest rates, now might be the best time to lock in a good rate before they start to rise again.
If your goal is to reduce your monthly mortgage payment or save money, you’ll need to use an online mortgage refinance calculator to determine if refinancing your current home is a good option. You can also head to Credible to crunch the numbers and determine your estimated monthly payments and more
- A better mortgage rate
- A lower monthly mortgage payment
- A shorter mortgage term
- Cash-out refinance
A better mortgage rate could mean substantial savings. A 1.0% rate deduction on a $200,000 home with a $160,000 mortgage saves you $100 a month. This might not seem like much but on a 30-year term, this saves you $30,000 in interest.
A lower rate can lower your monthly payments and put you in a better financial position. If you’re paying less in interest, you have more money to work with each month. That extra cash could be put to better use in a retirement account or towards another long-term financial goal.
To see how much you could save on monthly payments today, crunch the numbers and compare rates and mortgage lenders using Credible’s free online tool. You can also use a refinance calculator to help figure out how a new home loan will impact your personal financial situation.
Many buyers purchase a home with a 30-year mortgage loan and choose to refinance to a 15-year fixed-rate mortgage. If you have 20 years left on your mortgage and refinance into a 15-year mortgage, the lower interest rate and the shorter term will greatly reduce the amount you pay in interest.
You can borrow money against your home equity with a cash-out refinance. This can be a cost-effective option if you need to borrow.