What does a 3.50% with a 30 year fixed rate mortgage mean?
We have all heard the ads about how rates are at all-time lows. It seems like the phrases “historic” and “record lows” have become the new rubber stamps when it comes to talking about interest rates these days. Mortgages have been around forever. When mortgages started, they had variable rates with huge down payments. As home values continued to increase, the need for lower monthly payments increased and thus, the 30 year mortgage was born. When trying to Google search for “when was the first 30 year mortgage”, all you get is refinancing links. Shocking!!!
Although we can’t tell you what the actual lowest rate was, we can tell you what was going on in 1951. That year is important to all of us because that is when James B Nutter Sr. created this company. Here are some examples of what was going on:
Average home price $16,000
Average income $3,515 (That is ANNUAL income.)
A gallon of gas $.20 (Less than a quarter.)
First class stamp $.03 (That is what you use when you send a letter. These things don’t have a send button.)
Sliced bacon $.63 per pound (Everything is better with bacon.)
As you can see, things have changed since the “good old days” but when it comes to interest rates, these are the good old days. We haven’t seen anything like this. 3.5% is a rate that is so low that it is hard to wrap your head around. If this were a game of limbo, this has to be the bottom notch and only the most flexible people would even try to get under. There is no reason to be sitting on the side lines waiting for rates to get better. How much closer to the floor could we get?
Call us today to talk to one of our qualified licensed loan officers about how you might benefit from a lower interest rate on your home mortgage!