At the end of 2018, economists predicted that interest rates would continue to creep up. They expected we’d be looking at a fixed rate of about 5% right about now. So much for predictions. Mortgage rates dropped again. That’s great news for homebuyers who were perched on the fence for the past year, watching and waiting. Now, Homes By Taber has to ask, why are you still waiting to buy a new home?
Just a week ago, Freddie Mac reported that the interest on a 30-year, fixed-rate mortgage had dropped from 4.28% to 4.06% in one week. A year earlier, that rate was 4.4%, the lowest we had seen in 14 months. We saw a 7-year high in November 2018, when the rate reached 4.94%. In spite of the predictions that the 4.94% would keep inching its way to 5% and beyond, the rates took a strange turn.
Look at it this way. If you were looking to buy a home priced at $250,000, with 20% down, the monthly mortgage (excluding the variables of property tax, insurance, and HOA), the payment at 4.94% would be $1,066, according to the Zillow mortgage calculator.
At 4.06%, the monthly payment would be $962. That’s a savings of $104 per month and $1,248 per year. Could you use an extra $1,248 in your bank account each year? Or…leverage your savings to buy “more” home—more features, more square footage, whatever you need! Or, for the exact same payment, you could buy $40,000 more home.
There’s no difference in the home you buy. The features are exactly the same. The only change is how much interest you pay. Why would you want to pay more to own the same home?
We asked Aimee Dauphin, Senior Mortgage Consultant at Great Plains Bank, about this unexpected change in rates. We’ve worked closely with Aimee over the years, as she has helped many Homes By Taber customers work smoothly through the home financing process.
“Obviously, most people in the mortgage industry didn’t see this rate decrease coming. It’s really a gift to people who are ready to buy a home right now.” She added a warning, “Just don’t expect this trend to continue.”
Aimee also suggested that if you’re house-hunting right now, you should be working with a lender in order to secure pre-approval and be ready to lock in a rate before it moves upward.
Great Plains Bank offers our homebuyers a $2,000 closing credit when purchasing one of our new construction homes in the Oklahoma City metro area. There’s even more value to this incentive. Great Plains Bank doesn’t charge an origination fee, like most other lenders do. The origination fee covers the cost of processing the loan application, and the amount can be as much as 1% of the loan amount. If you were to finance your $250,000 mortgage with a lender that charges an origination fee, you would need to bring an additional $2,500 to closing. When you factor in the $2,000 credit offered here and the lack of this other fee, you would actually be saving $4,500 over the closing cost with the lender that imposes the origination fee.
When discussing your home loan with a lender, Aimee recommends that you learn about all the fees to be incurred when financing a home with that company. Be clear about the loan requirements, your qualifications, and ways to get the best rate possible. Also explore the many loan programs available, including the no-down-payment VA home loan and the FHA home loan that requires only 3.5% down.
“Some prospective buyers are hesitating because they’ve heard mortgages are so difficult to qualify for,” Aimee added. “With so many options, we do our best to tailor a mortgage to an individual’s particular financial situation.”
Taber LeBlanc, owner of Homes by Taber, also warns homebuyers with this, “most builders that advertise that they pay closing costs, just have their lender raise the buyer’s rates and the lender covers the closing costs.” This means that this is not a bargain for the homebuyer, but rather a bait and switch gimmick to entice customers. Great Plains offers $2k in closing costs with the best rate. Taber explains, “this doesn’t mean that we are not able to do the same as other builders. We work with Great Plains to cover closing costs and wrap that amount into their rate, but we prefer to be up front about it with a no smoke and mirrors approach. Our lender can raise rates just like everyone else and pay closing costs. We do this all the time. We just let people know upfront and give them the option to do so.”
Stop waiting. Talk to a lender to learn about the potential you have right now to afford a new home. Then browse Homes By Taber’s communities of single-family homes. We have move-in ready homes available right now, starting as low as $213,340. Each one includes standard features like a finished outdoor living space with a wood-burning fireplace, center island kitchen with granite countertops, jetted tub in the master bath, a storm shelter in the garage, tankless water heater, and indoor air quality filtration system. We also build our energy-efficient homes with a footing and stem foundation that provides the structural integrity you need to remain sturdy on Oklahoma’s soil. You get all this and more with our “Proudly Overbuilt” tradition of excellence.
With Great Plains Bank’s closing cost credits and a low-down-payment program, you might be in the perfect position to take the express lane on the path to homeownership! Contact Homes By Taber to see where your new home could be.
About Homes By Taber
Homes By Taber, a local homebuilder in the Oklahoma City metro area, offers new, energy-efficient homes starting at 1,500 square feet of indoor living space and going up to 3,350 square feet of indoor living space. Prices for these new single-family homes start below $200,000 and go up to the mid $500,000 range. Homes By Taber was founded in 2000 by Taber LeBlanc. We currently build in 15 different locations with new construction homes for sale in the OKC metropolitan area.