TIME TO THINK ABOUT REFINANCING AGAIN
Now is a great time to check the rate on your home mortgage, because you might save a ton of money by refinancing. As we mentioned last week, refinancing has jumped 21-percent in the last two months and we can credit British voters, central banks in Europe and Japan, and a global economy that just can’t get out of first gear.
The average interest rate on a 30-year fixed-rate mortgage was 3.49 earlier this week, which is down from 4.2 percent a year ago and 3.9 percent at the start of 2016. Rates on a 15-year mortgage are also down. This movement is being driven by shifts in the global bond markets.
Janet Yellen, Chair of the Federal Reserve Board, has stated now is not the time to raise interest rates and this statement has provided speculation that rates may even go down further.
Using the rule of thumb that refinancing frequently makes sense when rates have fallen by a full percentage point, people who took out loans at the prevailing rate at various points in late 2013 and first part of 2014 might see favorable economies for refinancing. This is especially true for anyone whose loan was first made anytime before mid-2010.
Folks with narrower gaps between their interest rate and those that prevail now might also consider refinancing. That makes sense particularly if they expect to remain in their current home for many years, thus allowing time for even modest monthly savings to accumulate enough to justify the one-time expenses tied to refinancing a loan.
Lower rate can make this a good time to refinance for people who want a different type of mortgage, like moving from a 30-year loan to a 15-year loan to pay off the home faster.
No one can know whether rates will pop back up or continue to drop. But the best way you can determine what is best for your family is to contact a mortgage lender here in Visalia, Tulare or Porterville. Using a local, experienced professional can give you great knowledge of the marketplace and current rates. Now is the time to make that call.
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