According to Zillow.com, mortgage rates in the State of Texas are at a 2 year low. On average, state mortgage rates are hovering around 3.1%. In Brazos County, which is home to College Station and Bryan, TX, mortgage rates are comparable.
Depending on your real estate mortgage lender, homebuyers in Brazos County with good credit can find rates around 3.5%. This means that for a home costing $350,000, homebuyers can get an interest rate that will put their monthly payment around $1,500.
What does a low interest rate mean?
A low interest rate is a sign that the federal government and financial bodies want people to have more money to invest in the economy. By lowering interest rates, monthly mortgage payments are cheaper, meaning homeowners can spend that extra cash on other things and stimulate growth.
It also has an impact on the housing market. Low interest rates typically drive buyers to the market to take advantage of the lower monthly payments.
What is the difference between buying and renting?
Ultimately there are 2 major differences between buying a house and paying mortgage and renting a property:
- Down payments – when you’re renting a house, there may be a deposit required. For home purchases, your mortgage lender will often require a downpayment on the house, both showing your intent to fulfill your financial obligation and ensure that your monthly principals are as low as they can be. Down payments are determined by the buyer and lender, but often comprise 5, 10, 15, or 20 percent of the asking price.
- Investment equity – For personal finance experts, buying a house is one the very few personal investments that will actually accrue value over time as opposed to decreasing in value. When you buy a vehicle, the second you drive it off the lot, it loses value. So when you accept a car loan from the bank or dealership, you’re essentially paying back an amount at a loss. When you purchase a home, it doesn’t lose value. In the vast majority of real estate purchases, homes increase in value over time so by the time you sell it, you stand to make more money back than you put in.
Why You Should Buy in Brazos County
Right now, interest rates are at a historical low. If you are considering buying in the Bryan/College Station market, it’s a good time to get in. Here are some things you should know if you’re trying to buy a home during a low interest rate period:
- The market is competitive – low interest rates drive buyers to the market creating competition. In College Station and Bryan, TX, homes can move off the market in a matter of hours, often involving a bidding war that drives the price above asking price.
- The longer your term, the higher the interest rate – if you’re in a position to have a 15 year or 20 year mortgage, interest rates drop, allowing you to take more advantage of low monthly payments.
- Be prepared to go above asking – because low interest rates drive a seller’s market, be prepared to go above asking price for a home you really like. There will likely be multiple buyers at the table driving up the asking price.