As I mentioned yesterday my husband and I decided to refinance our home. We considered waiting to see if rates would continue falling, but ultimately decided this was the right time for us. Of course it never hurts to find financial experts who agree with our decision. So I poked around the Internet and found the Rate Trend Index on bankrate.com. If you are considering refinancing your home anytime in the near future you may want to subscribe to the Rate Trend Index alerts.
For the week of January 24 – 30 the majority of polled experts believe mortgage rates will rise over the next 35 to 45 days. About one quarter think rates will fall and the rest believe rates will remain relatively unchanged.
Here are a few of the expert’s comments:
- Rates have had an unbelievable run as of late. Anytime we have approached these levels in the past four years, we have been jerked higher in coming weeks, and I expect nothing different. If you haven’t applied for a loan and/or locked your rate, do so now.
Jim Sahnger, mortgage consultant, Palm Beach Financial Network, Stuart, Fla. - With the intent of stimulating the economy, the Fed has cut rates, and will most likely do it again. This will entice more international investors, boost consumer confidence, leading to higher rates.
Steven M. Levitt, vice president of mortgage lending, Guaranteed Rate, Chicago - Mortgage rates have been in free fall. But how much longer can it continue? Bonds are overbought and mortgage rates could bounce back quickly.
Greg McBride, CFA, senior financial analyst, Bankrate.com
Of course there are a few that think rates will continue to fall:
- The more the public hears about recession, the more likely it is to happen. The absence of inflation pushes mortgage rates down.
Dan Green, mortgage planner, Mobium Mortgage, Chicago
Since we have no idea what rates the future will bring my husband and I decided to go ahead and lock in our loan. I think it’s wise to search for cheap mortgage deals right away. After all, 30 and 15 year fixed mortgage rates are close to reaching historical lows.
Good luck with the refi! Let us know how it goes!
Thanks for the excellent post. I am also interested in refinancing, but had some questions.
I have heard that the rule of thumb is to wait until the refinance interest rate is 1% less, is that true?
How much does it generally cost to refinance?
@jake — I don’t claim to be an expert but it’s always best to think about interest rates and closing costs when refinancing. For example, if you save $100 a month by refinancing, but you have to pay $2400 at closing, it’ll take you two years to break even with the new mortgage.
There are tons of calculators out on the internet that can help you run these calculations. Check out the Should I Refi calculator here.
Keep one thing in mind when you refinance a 30-year fixed loan: the term will start over. Meaning, if you currently have a 30-year fixed loan and have paid on it 5 years, your new loan will start that 30 years over again. So, your monthly payment will go down (due to the new percentage rate) but you’ll be paying on it longer. Just keep in mind that the amount you end up paying at the end of each loan may be the very close. So, the decision may be: do I want to save $100/month or have my mortgage paid off 5 years earlier. Just food for thought…
You posted this article about 2 yrs ago. Now it is 2010 and the rate right now is at 4.5% for 30yrs loan. So I guess the financial experts are wrong.