Despite the rocky start to the markets and the Fed recently increasing interest rates, mortgage rates are dropping. For the past six weeks, the average mortgage rate for a 30-year fixed rate on a single family home has fallen 36 basis points; it’s lowest in 10 months (Washington Post).
The drop in mortgage rates is in part due to a strong bond market as well as a mild winter housing market. These lower interest rates are grabbing the attention of both investors and individuals purchasing homes. According to Bill MacLeod of Coldwell Banker in East Lansing, this is the best winter housing market he has ever seen. It is expected that the lower rates won’t stay this way for long, and now is a great time to purchase real estate with leverage.
Use Leverage to Buy Investment Properties
Leverage has often been a tool sought out by investors for its ability to maximize returns and require less capital up front to purchase real estate. Optimal conditions for leverage don’t show up very often, but with the rates dropping like they have been recently, now is an ideal time to increase real estate holdings and capitalize on lower rates.
Mortgage rates ticking downward translate to higher yields for investors who use leverage, and some investors are even choosing to refinance their rental properties that were purchased at higher rates in the past.
Whether you’re refinancing or getting a loan for the first time, you must agree that now is the time to invest using leverage. If you’re interested in loans for investment properties, take the next step and get prequalified by HomeUnion® Lending.