“BREXIT” and Your Local Housing Market
Brexit and Your Housing Market
For the average American who is not an expert on foreign markets, stocks, mortgage rates, etc., the term “Brexit” may sound like a made up word with a many negative emotions attached to it. You may ask yourself, “I’m an American, why do I care about Brexit?” This is a very reasonable question to ask. Let’s take a moment to talk about how foreign markets effect you in America, and how you can seize this unique opportunity that we are in. Yes, I did just say “OPPORTUNITY!”
To be clear, I’m not a financial adviser nor a stock expert. I do not have a crystal ball to tell what the future holds. What I do know is how Great Britain’s recent vote to leave the European Union has effected the mortgage industry, and ultimately, your interest rates. As stated by The Journal News, there is an Upside to Brexit. Many Americans have a great opportunity to purchase a home with a low low rate, or lower their monthly payments and refinance.
But, why does something that happens in another country effect interest rates in America? You see, when foreign markets go into chaos, it is ultimately due to “uncertainty”. On June 23, 2016, the people of Great Britain voted to leave the EU. Their Prime Minister resigned, stocks plummeted, but that does not mean that they are 100% leaving the EU. It is up to the Prime Minsiter (which they currently do not have) to invoke Article 50 of the Treaty on European Union, which allows Britain to leave the EU. First, they need a new Prime Minister. If they decide to leave, the process takes a minimum of two years to complete. This “uncertainty” from investors is likely to be around for a little while. Investors, in return, seek more “secure” investments, which are usually U.S. Treasuries. This results in lower interest rates.
Ok – here is your OPPORTUNITY!
In the local Grand Rapids, MI market, it is no secret that the housing market is HOT. Property values have risen and inventory is extremely low. If you already own a home, you may have gained some equity over that last few years. However, gaining equity doesn’t always mean it’s a good time to refinance. In many cases, you also need to lower your interest rates. This is why now is a great time to refinance. The increase in home values gives homeowners the opportunity to lower their interest rates, and also get rid of Private Mortgage Insurance (PMI). If your new loan amount is equal to or less than 80% of the value of your home, then mortgage insurance is not required with a conventional loan.
Even if you don’t have quite enough equity, The Grant Alexander Mortgage Team at VanDyk Mortgage has options to eliminate PMI from your monthly payments. This can potentially save you thousands of dollars! If you currently have an FHA loan with a low rate, you may benefit from refinancing into a conventional loan with no mortgage insurance. If you want to purchase a home, these low interest rates help make homes more affordable, even with the increase in property values.
How We Can Help
Find opportunity in the midst of chaos. Contact us now to see if you can take advantage of this unique time in real estate. www.GrantHomeLoans.com