What the Mortgage Turmoil Really Means for Borrowers
Real estate expert, Jeff Adams, says that now is the right time to get a new, competitive mortgage or get your mortgage re-negotiated. As I write this the historical has happened: The Fed has, for the first time in 25 years, reduced interest rates for borrowers by a whopping 0.75%, that’s three quarters of one per cent which, may not sound that much if we are talking about, say, borrowing a dollar, but the moment you multiply this by a few tens or hundreds of thousands it adds up faster than you can say “market revitalisation strategy”.
Ok. What does this all mean and why is it so important to a future or current mortgage borrower? Simply put, the Fed’s reaction to a perception of a slowdown in the real estate market of our country was to make it easier for money to be borrowed by reducing the cost of borrowing it.
This means that lending institutions can now borrow money at far more preferential rates than they could in the past and this is passed on to borrowers who are now able to borrow money from them at a lower cost and, as you would expect, far more easily.
So far this is easy to follow. If you are a prospective, new house owner looking for a mortgage and getting ready to leap on the mortgage lender’s turnstile where you go from one to another trying to find the right mortgage for you, the chances of you finding a mortgage lender that will lend you money have just become higher. The chances of finding a mortgage that’s a little more competitively priced than it would have been just a few months ago also just became better.
The thing is that when the mortgage market gets shaken up like this mortgage lenders start to compete with each other not just for newcomers to the mortgage lending market but also for existing customers. This means that suddenly the market is beginning to see an influx of mortgage transfer and mortgage refinance deals which allow you to switch mortgage lenders or even re-negotiate your mortgage with existing ones.
When that happens, competition amongst mortgage providers increases and consumers are faced with more choice and more competitive deals. Whether you are looking for a brand new mortgage as a first-time buyer or are ready to jump ship and switch mortgage lender it looks like that the time is right about now as a result of the Fed’s interest rates cut which has resulted in better deals and a much easier access to money you want to borrow. The trick, comes, always, in picking the right one for you, understanding fully what you are getting yourself into and not being afraid to play hardball, after all, it’s your money!
Jeff Adams
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