Record high credit scores & near record low rates – the perfect time to borrow
Bottom Line: It’s pretty much like this. If you’re potentially needing a sizable loan, you should be looking to do it right now. I’ve discussed the near record low mortgage rates – back in the mid 3% range on a thirty-year fixed that are available. But it’s not just mortgages. There’s never been a better time to borrow than right now. But if rates were slightly lower seven years or so ago why would now be better?
The last time interest rates were as low as they are today the unemployment rate was 7.3% and the average person had a FICO score of around 686. Today the unemployment rate is a near-record low of 3.7% - literally half of where we were seven years ago, and the average FICO score is a record high 706. Put it altogether and right now is literally the best time to borrow for the average person in American history. This is being driven in large part by the near record low unemployment rate, including records for all minority groups, and record high incomes that have been growing well above 3% for going on two-years at a time when inflation is low – meaning that the average person’s buying power and financial quality of life has been progressively improving.
Aside from looking into buying a home, car, boat, etc., if you have a loan you should be looking to refi. According to my research and estimates, fewer than 2% of people have lower average borrowing costs on existing loans compared to what’s available today and the odds are you have better credit quality which could lower the rate all by itself. That’s a one-two punch of opportunity that works in your favor.