After a long hiatus, A Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile is back and here to answer a very common question these days…
“What is today’s rate?”
Rates are low, historically low and many people are taking advantage of these rates and refinancing their existing mortgages. Even with the unprecedented number of refinances taking place, there are still many people sitting and waiting for a better rate. Here are a couple of things to consider.
- If you know you want to refinance, go ahead and start the process now but not lock in the interest rate. When the loan is approved, you can then lock the rate and take advantage of a shorter rate lock window (say 12 or 15 days) which is at least 0.250% lower than a 45 day rate lock. For more details, see this previous post.
- If you want to continue to wait to lock in a 45 day rate lock, keep this in mind. The longer you wait, the more you may be missing out. For instance, today rates for a 45 day rate lock are 4.75%. If you are thinking about passing up 4.75% to wait for 4.5%, I would consider the math. For each month you wait for lower rates, you are passing up the opportunity to save $$ each month. Let’s say you are going to save $200 per month by refinancing; if you wind up waiting 6 months to refinance, you have lost $1,200 just in the time spent waiting and watching . . . all in an effort to hopefully save an additional $30 per month (0.25% for a $200,000 mortgage is about $30 per month). And the cost of waiting the 6 months will now take 40 months to recoup at the extra $30 you have saved. Of course, this example assumes that interest rates will still be at their all-time historic lows when you are ready to move forward.
Bottom line… if you know you want to refinance and take advantage of these historic rates, at least go ahead and start the process today. You can lock in at any time, and by at least getting “in line” for underwriting, you ensure that if rates to hedge up, you won’t completely miss out. Every time there is a refinance boom, people miss it because they continue to wait for the rate to improve.
For what it is worth, I’ve already refinanced not wanting this opportunity to slip away. I know this sounds like a stereotypical “used care salesman”, but truly, these low rates won’t be here forever.
Clay Jeffreys is a Mortgage Consultant with Dunwoody Mortgage Services, Inc. and writer for “Blog Pertaining to the Acquisition of a Mortgage to Purchase a Domicile.” Dunwoody Mortgage Services seeks to provide mortgage brokerage services with the highest standards of service, care, honesty, integrity and value; concentrating on owner-occupied, residential financing. For more information about Dunwoody Mortgage and available programs, please visit www.dunwoodymortgage.net.
