Mortgage rate sea sickness.
Ok, the big questions of the month…are rates going to drop and should I refinance? Here is my opinion (do u expect anything less?) on what you should do. First, I do not know what to tell you about rates right now. Are they going to drop…I would bet “yes” but to what level I do not know and I think everyone is clueless on how long it will take. The market is WHACKED and I venture to say everyone would admit this is new for all of us. The economy, foreclosures, lenders, defaults, secondary market and MBS, appraisal values, the list goes on. These are new and very cold waters and you had better believe I have my wetsuit on as I am swimming in them. Today rates were ugly as to what I was looking at on Monday and Tuesday. Realistically, you just have to watch it but be ready to act on that window of opportunity. Second, should you refinance? I would say if you are sitting anywhere at / or above 6.375% with a loan amount of greater than 150K then you should keep your eyes open and have a plan. At least have knowledge of what a refi at 6% or lower could do for you ( look at No Points vs. 1 point paid ). If you are on an adjustable – definitely be thinking about getting it put into a fixed rate this year.
Overall, crunch the numbers and see how it helps you and your family. Remember to be conservative on any appreciation on your home at it pertains to appraisal value. Many areas have changed and current market value may play a bit part on how your program calculates. Currently, I have clients who I have their files prepped and ready to rock as they sit on the sidelines. If rates drop somewhere in the high-fives or lower I am on the phone with them discussing it.
