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Everybody has heard about rates falling in the past few months. In fact, rates are near 3-year lows. But are they going lower? Should you wait to refinance?
We’re constantly asked where rates are headed and whether folks should hold off on refinancing for lower rates.
The truth is, nobody knows where the markets are headed. I know several highly respected experts who felt the real estate market was going to “crash” 3-4 years ago. Well, prices have gone up 20%-30% in most areas since then. Numerous have felt the stock market would be dumping over the past couple years, and markets are now near all-time highs. And not many could’ve predicted negative interest rates around the world and rates dropping back into the 3’s here in the U.S. Needless to say, it’s impossible to accurately predict our markets.
With that being said, our advice is to always make decisions based on the best timing for your own personal life & finances. Everybody is at different life & financial stages. Each person and family has different needs at different times. If a refinance makes sense for you now and has a quantifiable/tangible benefit, why wait until rates drop just a little more?
We’ve seen countless folks get hurt by this strategy over the years as rates can rise overnight, very quickly evaporating the availability of a refinance. Plus, gambling on lower rates presents the problem of deciding when to “pull your chips off the table”. Like Blackjack in Vegas, when is enough, enough? You’ll rarely pull your chips off just before that bad run of cards. Similarly, very few hit the absolute best point in the markets.
Besides, if it makes solid financial sense for you to refinance and the timing is good with your personal life, refinancing now doesn’t stop you from another change later, should rates drop further down the road. If you’re concerned about paying fees now and missing out on lower future rates that may come, you might opt for a lower cost loan to “hedge your bets”.
In the end, ensure you’re working with a professional lender who has your best interest at hand, which means giving you the facts and information you need in order to make the best decision for your family.
Let us know if you’d like a personal review of your mortgage and overall financial situation. We’d love to help!