As mortgage charges reached one other low Feb. 19, homebuying affordability improved but once more. And that is excellent news not just for individuals seeking to purchase a house, but additionally for many who already personal a house.
“The 30-year fixed-rate mortgage (FRM) averaged 6.01% as of February 19, 2026, down from last week when it averaged 6.09%,” Freddie Mac reported. “A year ago at this time, the 30-year FRM averaged 6.85%.”
“This lower rate environment is not only improving affordability for prospective homebuyers, it’s also strengthening the financial position of homeowners,” the government-sponsored enterprise added.
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“Over the past year, refinance application activity has more than doubled, enabling many recent buyers to reduce their annual mortgage payments by thousands of dollars.”
Bestselling private finance creator Dave Ramsey, nonetheless, focuses extra on the 15-year fixed-rate mortgage when he advises his followers.
As of Feb. 19, “the 15-year fixed-rate mortgage averaged 5.35%, down from last week when it averaged 5.44%,” in line with Freddie Mac. “A year ago at this time, the 15-year FRM averaged 6.04%.”
A silver key sits throughout U.S. $100 payments.
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Dave Ramsey urges homebuyers to make use of 15-year mortgages
Ramsey recommends that individuals seeking to purchase a primary house view a 15-year fixed-rate typical mortgage as the most suitable choice.
“Though the monthly payments are higher than 30-year loans, you’ll pay off your mortgage in half the time,” Ramsey wrote. “Plus, most 15-year loans have a lower interest rate, and that interest rate will be locked in for the life of the loan.”
Ramsey additionally means that potential homebuyers get preapproved earlier than seeking to purchase a home.
“It pays to get preapproved for a loan (not just prequalified),” he wrote. “Preapproval is when your lender verifies your financial information and gives you a letter saying how much money you can borrow. It shows sellers you’re serious and can give you a leg up in a competitive market.”
“Just know some lenders may preapprove you for a bigger loan than you actually need or can afford, so it’ll be super important to keep that 25% rule (that monthly housing costs should be 25% or less of one’s monthly take-home pay) in mind when deciding how much to borrow.”
Ramsey warns homebuyers about unhealthy mortgage merchandise
Homebuyers have loads of choices on the subject of financing a house buy, and it may be tough to know which selection is greatest.
Ramsey’s most popular technique is to purchase a house with money. It might sound stunning, however many individuals do it every single day, in line with Ramsey.
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“If that’s not feasible for you, the next best thing is a smart home mortgage loan,” Ramsey wrote. “It may be easy to dive headfirst into the mortgage option that will allow you to buy a home with next to nothing down.”
“But a bad mortgage product can be a liability in your financial portfolio,” he continued. “A home should be a blessing to your family, not a financial nightmare.”
Zillow outlines homebuyer affordability
- Lenders consider affordability utilizing gross month-to-month earnings, which means the quantity earned earlier than taxes or different deductions, in line with actual property know-how firm Zillow.
- When co‑borrowing, they mix all debtors’ salaries — for instance, a mixed $100,000 wage equals about $8,333 in gross month-to-month earnings.
- A standard guideline is to maintain complete month-to-month housing prices (mortgage, taxes, insurance coverage) at not more than 30% of gross month-to-month earnings.
- Primarily based on that rule, a family incomes $90,000 a yr (about $7,500 per thirty days) would possibly afford a house round $246,000, assuming typical taxes, insurance coverage, and PMI.
- With greater earnings, affordability rises: a $200,000 wage (about $16,666 per thirty days) helps a house close to $631,000 underneath the identical assumptions.
- On the higher finish, a mixed $500,000 wage (about $41,666 per thirty days) may qualify for a house round $1.7 million, relying on down cost and native prices.
(Supply:Zillow)
Ramsey emphasizes wants vs. desires for homebuyers
It’s simple to think about that your first home would be the one you keep in perpetually, however that’s hardly ever how life works, Ramsey said.
There’s no must chase perfection on day one — an individual can at all times transfer up when their circumstances change.
“Sit down and list out the three to five things your house absolutely must have, focusing on the true nonnegotiables,” Ramsey wrote. “For example, maybe you need to live close enough to commute to work every day, or maybe your pets need a fence.”
“Then, write down a few ‘wants’ that could be the cherry on top of your first home. A swimming pool? Granite countertops? Enough bedrooms so your kids don’t have to share? It’s up to you!”
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