October 03, 2024

There’s good news for homebuyers. The Federal Reserve recently announced a 0.5 percent decrease in interest rates. As of late September, long-term fixed-rate mortgage rates are now at 6.2 percent, the lowest since February 2023. What could that mean for you? Here’s an overview.

Lower Monthly Payments

One of the most immediate and tangible benefits of lower interest rates is the potential for reduced monthly mortgage payments. As rates decrease, the interest portion of your mortgage payment shrinks, making homeownership more affordable. This could allow you to qualify for a larger loan or make your desired home more attainable.

Easier Mortgage Qualification

Lower interest rates can make it easier for you to meet lenders' debt-to-income (DTI) ratio requirements. This means you may have an easier time qualifying for a mortgage that might have been out of reach at higher rates. Lenders may also view borrowers as less risky when rates are lower, as the reduced monthly payments decrease the chances of default.

Increased Purchasing Power

With lower interest rates, you may find that you can afford more home for the same monthly payment. This increased purchasing power could open up opportunities to buy in neighborhoods or home styles that were previously out of reach.

Speak to Nolina Builders Today

Want to see how far your home buying dollars will go now that interest rates are dropping? Stop by Nolina and speak with our builders’ representatives. They can help you choose the floor plan, options and upgrades that best meets the needs of your family while still keeping you on budget. They might be able to find ways to help lower your interest rate even more.