By Doug Goelz, Mortgage Services

Mortgage rates moved to near historical lows this month. Fears of the effect of the Coronavirus on the global economy, and a subsequent “emergency” rate cut by The Federal Reserve Bank in the first week of March, caused bond rates to drop; mortgage rates followed.

Rates for 30 year fixed rate loans for borrowers with good credit were in the very low 3% range as of March 6. Rates for 15 year fixed rate mortgages were below 3%.

As a homebuyer, if you end up getting into contract soon, you may be able to finance at some of the lowest rates we have seen in decades.

If you already own a property and have a mortgage with a rate of 3.625% or higher, it may make sense to refinance. You could lower your monthly payment with a lower interest rate, or shorten the term of your loan by getting a mortgage for less than 30 years. Either way, you could end up saving tens of thousands of dollars in interest over the life of your loan.

Homeowners also might consider taking some cash out at these very low interest rates. For example, you could pay off a line of credit with a variable rate and lock in your financing at a much lower interest rate. Or, you could simply use “cash out” for any purpose you think is worthwhile. There are not many alternative forms of financing with lower rates than current mortgage interest rates.

There is a down side to the current low rates. All lenders and escrow companies are inundated with new loans. This means processing is slower, and rates have to be locked for longer periods of time. In addition, appraisers are busier, so it will take longer to get appraisal reports. Borrowers who are refinancing can tolerate the longer processing times, but homebuyers may get push-back from lenders on escrows much less than 30 days. Homebuyers, in particular, should be prepared with their lender before making an offer by having all documentation submitted and making themselves available to respond quickly to their lender.

I am always happy to answer any questions about any mortgage financing you need. Feel free to contact me at 415-730-4665 or