The Inside Scoop on Low Interest Rates

March 12, 2020 by Joe Grunnet

As many of you already know, mortgage rates are currently at historic lows. We thought it was the perfect time to sit down with JJ Ellingson with LeaderOne Financial to get the inside scoop on why rates are low, how they compare to last year, and much more.

 

Why are rates so low?

 

JJ Ellingson: All we hear about today is the Coronavirus. It’s the single biggest factor that has driven down mortgage rates to the lowest levels in history. The Coronavirus has caused investors to flee the stock market to safe-haven investments like treasuries which drives mortgage rates down.

 

How do current rates compare to last year?

 

JJ Ellingson: In January 2019 the national average for mortgage rates was 4.51% in January and declined to 3.74% at the end of 2019. Overall rates are at least .45% lower than they were last year and 1.22% lower than the start of 2019.

 

How have past elections affected rates?

 

JJ Ellingson: In 2016 we saw an immediate jump in rates the next morning. It’s tough to say what will happen because there are many variables that impact rates, but here is what we saw before and after the last four presidential elections.

 

2016 – Rates went from 3.6% in October to 4.2% in December

 

2012 – Rates went from 3.38% in October to 3.35% in December

 

2008 – Rates went from 6.2% in October to 5.29% in December

 

2004 – Rates went from 5.72% in October to 5.75% in December

 

Is now a good time to refinance?

 

JJ Ellingson: Your home is one of the biggest items that is financed, and I recommend that a homeowner evaluate their mortgage options annually to confirm that they are in the right mortgage. With rates at historical lows, this is absolutely the time to evaluate mortgage options. If you refinance, you can:

 

  • Lower your interest rate and save money
  • Lower your interest rate and remove private mortgage insurance
  • Reduce your mortgage term by going to a 15- or 20-year and maintain a similar payment due to low rates
  • Pull equity out to pay off debt
  • Pull equity out for home renovations

 

All of these items can be explored, and it shouldn’t cost you anything to look into your options.

 

Ready to Learn More?

 

If you’re interested in learning more about purchasing a home in Minneapolis or refinancing your current mortgage, reach out to JJ Ellingson or one of our Urban Realtors. We’ll move as fast—or as slow—as you want to go. Above all, we want you to have peace of mind and the knowledge needed to make 2020 a financial success.

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