Buyer's Market: Mortgage Rates Hit Historic Lows

By KBJR News 1

June 8, 2012 Updated Jun 8, 2012 at 8:52 PM CDT

Duluth, MN (Northland's NewsCenter) - With the current, 30–year, fixed–rate mortgage set at 3.625 percent, according to Messina and Associates real estate agent, Michelle Peterson, now is the time to buy a home.

"...historically low rates. I mean, unbelievable rates. People were clamoring for 5's a couple of years ago. FHA rates are, actually, even lower than that—below 3.5 percent—which a lot of first time home buyers use, because it has a lower down–payment," said Peterson.

...low interest rates, that, according to Assistant Vice President of Lending for the Duluth Teacher's Credit Union, Byran Lent, translates into significantly lower finance charges over the course of the loan's life.

"It allows people to stay on their properties, fix low payments, principal and interest, and they are able to get [a] great principal reduction on a property that they once, maybe, paid a higher interest rate on," said Lent.

According to Lent, one of the major contributing factors to these record low numbers is the fact that our economy is still recovering: "We also are still dealing with somewhat of a stressful environment that needs assistance, and rates being low are, hopefully, the way to help people to get into properties."

Peterson says low rates will also keep money in the hands of the consumer.

"The difference between a 5% interest rate, and a 3.625% interest rate is, about, $120 a month in interest alone. I can think of way better things to do with $120 a month than paying a bank interest. Multiply that over 30 years? That's over $40,000 in savings," said Peterson.

...filling properties, and piggy-banks, in the process.

Peterson added that a potential hike in Northland rental fees could also boost property sales in the coming months.