Real Estate

Make most of cheap interest rates

BUYERS, sellers and home owners are reaping the benefits of unprecedented lows in interest rates, says Professionals Real Estate.

A spokesperson says the consequence of low interest rates over the last few years are higher property prices but with money being “cheaper” to borrow, buyers can extend their budgets and afford to offer more when bidding for a new home.
And for those home owners who are not looking to sell, there are several ways to use low rates to your advantage:
Refinance: If you were already considering refinancing your current loan, now is definitely the right time. When you refinance to a lower interest rate, you have the potential to reduce your mortgage bills by hundreds of dollars a month or even more.
Make extra payments: The other option with refinancing is to reduce your rate but continue making the same mortgage payments. You can take advantage of low rates to cut years off the length of your home loan and build equity in your home sooner.
Fix your interest rate: A fixed rate means you pay the same amount, even if official interest rates increase. You may wish to look into fixing all or part of your home loan for the next few years.
Borrow: With interest rates so low, it is a good time to take out a loan. If your property could use some upgrades, borrow while money is cheap. You could add significant value to your property with much less to repay than you might have to in a few years’ time. Be aware that an interest rate rise is inevitable and always try to have room in your budget to accommodate this.
Buy an investment property: It may seem counterproductive with property prices so high, but repayments are low and the demand for rental properties is strong in many areas. Do some research to figure out the best place to purchase an investment so you can take advantage of the low rates.