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A cheat sheet for homeowners and buyers on Trump and mortgage rates

trump and mortgage rates

We’ve got a new president, and no matter how you felt during the aftermath of what might be one of history’s most heated elections, we’re betting this thought crossed your mind: How’s this going to affect me? And more specifically, how’s it going to affect my money? This is at the heart of the hubbub surrounding Trump and mortgage rates.

A gut reaction to a new president in office, regardless of your political affiliation, is totally normal. After all, we’ve seen major economic changes in the past 20 years under the hands of Bush, Clinton, and Obama. Most, if not all, of these economic ebbs and flows affect the average homeowner — you.

Understanding the post-Trump mortgage rate scare

A new president is going to have an impact on the economy. One of the first things the market saw after Trump was officially elected in the early part of November was a significant spike in mortgage rates. Mortgage rates rose from 3.63 percent to 3.88 percent in mere days following the election.

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The reason for this, according to Time, is that the investors who are paying attention to Trump’s proposed economic policies anticipated inflation. These potential policies, which may include cutting corporate and personal income taxes, sent 10-year Treasury yields to their highest point in a year, bringing mortgage interest rates behind them.

But compared to what we’ve seen in decades’ past, mortgage rates are still pretty low.

Freddie Mac cites the mortgage rate average over the past 45 years at 8.26 percent, as confirmed by The Wall Street Journal, in contrast to the rates below 4 percent throughout 2016. That should make us all feel better. But we can’t pretend we didn’t see a sharp increase in mortgage rates following Trump’s win. Most recently, however, low-fee mortgages dropped close to 4 percent as the 10-year T-note dropped to 2.23 percent, after a controversial interview given to the WSJ by Trump.

If mortgage rates continue to rise over the long-term, The Wall Street Journal says, it will ultimately be bad for housing by making homes less affordable. In the short-term, a quick spike in mortgage rates because of an outside economic influence (i.e., a new president coming into office) may encourage more people to buy and refinance to jump on rates before they get even higher.

Buying a house post-election: Is it still a good idea?

We can all breathe a collective sigh of relief. For the moment. If you’re getting ready to buy your first, second, or even third home, the outlook is still good. Mortgage rates, despite post-election fluctuations, are holding steady. Homebuyers continue to feel optimistic. And the Mortgage Bankers Association notes that mortgage applications for new home purchases rose 6.7 percent for March 2017 compared to the previous year.

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Here’s what you need to know if you’re thinking about buying a house this year:

trump and mortgage rates

  • Mortgage rates are always subject to change and can even shift daily.
  • It helps to contact a skilled lender before you select a realtor to get an assessment of the market — and an idea of whether mortgage rates are anticipated to rise or fall in the near future.
  • Start on the right foot by contacting your mortgage lender on a Monday, considered the best day to check on mortgage rates. Traditionally, Wednesdays are when mortgage rates are most unpredictable.
  • Look for a lender who provides a quick prequalification. Prequalifying for a mortgage shouldn’t take long. And it’ll set the tone for your house-hunting by letting you know your price range.

Refinancing a house post-election: Is it still a good idea?

As a homeowner, you may be sitting pretty if you locked in a good rate when you purchased your home years ago. But, as life throws curveballs your way, there may be a specific reason why you are now considering a home loan refinance. Most homeowners look into refinance to save money by locking in a lower rate to provide lower monthly payments, shorten a loan term to pay off a mortgage quicker, convert an adjustable-rate into a fixed rate, consolidate debt, or fund home improvements or an investment property.

Here’s what you need to know if you’re considering a home loan refinance this year:

trump and mortgage rates

  • Refinancing your mortgage after the election can still be beneficial, with the same perks new homeowners are taking advantage of. Mortgage rates have varied but remain low for the time being.
  • Start by putting in a call to your mortgage lender. Whenever anything changes, including a new president in office, your lender will want to hear from you and address your concerns.
  • Try not to buy into the argument that a refinance “isn’t worth it.” A number of homeowners are letting low mortgage rates pass them by because of our current political climate. Lowering an interest rate by even one percentage point could reduce around $100 off a monthly mortgage payment.
  • If you refinanced within the past year (as it may have been recommended by your loan officer at your yearly checkup), the odds are big that you don’t need to refinance right now. A home refinanced in the last year should already have some of the lowest mortgage rates we’ve seen in a long time; in that case, there’s no need to refinance again a few months later.

How do you know if you’re eligible for a home loan refinance? Contact a loan officer to get your questions answered.

No matter what headlines you see buzzing around Facebook, this is one time when it pays not to listen directly to the media. Make this financial decision for yourself. If you don’t know where to start, talk to your loan officer first. For homeowners, having a quick sit-down to take a mortgage inventory each year can ensure your loan remains the right option for you and your family. And for homebuyers, you’ll get the inside scoop on what’s really going on in the mortgage market, with new policy changes factored in.

For educational purposes only. Please contact your qualified professional for specific guidance.

Sources are deemed reliable but not guaranteed.