While no one has a crystal ball to see the future of the economy, or the lending industry, the likelihood that interest rates will remain low is very good. According to Bankrate.com, given the current economic situation, the interest rates will remain low to help stimulate an economic recovery. During the third quarter of this year, economists were even thinking that interest rates could be as low as 0% with lenders outside the US offering negative interest rates. While this has yet to happen in the US, October refinance rates are under 3% and the market is definitely favoring buyers when it comes to purchases and piquing the interest of those looking to refinance. Many are asking themselves, will interest rates remain low? Should I take advantage of the current rates or wait to see what will happen?
Should I Wait?
If you're thinking that you'll wait for the interest rates to get even lower before refinancing, consider the following: experts think that in order for the interest rates to dip below 2%, the economy would have to show signs of instability and trouble ahead. Such signs include the stock market falling for an extended period of time, mass business closures again across the country and other serious blows to the nation's economic stability. However, what we can say with confidence is that there are no guarantees in life. Without being able to see ahead into the future, sometimes taking advantage of what you have here and now is the only sure thing. With interest rates under 3%, not taking advantage of this would be like leaving money on the table.
Winter is a Great Time to Buy
Traditionally, winter is a slow time in the real estate market and this year is most likely not an exception. Many homeowners tend to take their homes off the market because they are busy with family and the holidays. Usually, only the most motivated of sellers leave their home on the market, providing great opportunities for buyers to find a hidden gem. This also means realtors and mortgage lenders are less busy, and both are ready to help you find the lowest rates and affordable repayment options. Finally, since many people have already taken advantage of the low interest rates this year with regard to refinancing or home purchases, mortgage lenders have time to devote to new home- buyers. You'll likely find the personalized service you receive from more attentive lenders and agents to be excellent.
How Do I Know if I Should Refinance?
If you haven't refinanced your home yet this year, don't let the low interest rates pass you by. But before you start the process, ask yourself a few simple questions: is the interest rate at least a percentage point lower? Is there sufficient equity in the house so that I won't need to pay PMI (private mortgage insurance)? What is my long term goal? If your goal is to lower your monthly payments, refinancing is a great option. If your goal is to shorten the amount of time it takes to repay your mortgage, consider a loan with a shorter term. If you are unclear about your options, talk to an experienced mortgage lender. They can help you navigate the lending industry and help you find the right loan for your personal situation.