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QUICKLY DROPPING MORTGAGE INTEREST RATES

Ever since Britain’s surprise vote to leave the European Union, U.S. homebuyers and homeowners have been reaping an expected benefit- quickly dropping mortgage rates. The cost of the average fixed-rate mortgage is hitting its lowest point in more than three years- and economists expect them to head even lower. On Monday, June 27, the 30-year fixed-rate averaged only 3.46 percent , near the lowest average since 2012, according to a report from realtor.com. “Lower rates produce lower monthly payments and greater buying power- those who are well-qualified can afford a home that is 8 percent more expensive than at the beginning of this year,” says Jonathan Smoke, realtor.com’s chief economist. “That is more than enough to offset the rise in prices during that time.” That said, lower mortgage interest rates could prompt lenders to get stricter with underwriting provisions, Smoke adds. “As mortgage rates declined this year, we’ve seen that credit access has gone down too,” he notes. “That’s because lenders have become more risk-averse as their profit margins have been whittled down by the double whammy of lower rates and higher origination and servicing costs.” he concluded. With mortgage interest rates at all time lows, now is obviously a good time to reconsider selling and buying a new home.

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