For the past twelve months, I have been warning my clients of potential upward movements in mortgage rates. However, despite industry predictions, several days in June of 2010 saw mortgage rates that matched the historic lows seen in 2009. For those thinking of buying or selling a home, and for the many that have not yet Refinanced their home loans, this presents an unprecedented opportunity.
Mortgage rates have benefitted lately from the situation in Europe, as global investors have sought the safe haven of our US Bonds. However, as the Euro’s freefell is finally showing some signs of stabilization, traders and investors may begin to sell their US investments and move their money back into the European markets. This could reverse the trend and cause home loan rates to move higher. With that in mind, it is time to consider whether you should be making any changes to your mortgage plan.
Confused about rates? Call 801-501-7950
Should I Consider a Refinance?
Given the current state of the market, if you have a 30 year fixed rate that is higher than 5%, or a 15 year rate greater than 4.5%, there is a high probability that you can improve the cost of your home loan. Also, if you have an adjustable interest rate of any kind, it is worth considering securing a fixed rate to eliminate your interest rate exposure. With mortgage rates at historic lows, there is only room for significant changes in one direction: up.
What are the Fees to Refinance?
In most cases, the type of mortgage that I suggest to my clients considering a Refinance is one that does not have fees that are charged to the homeowner. Rather than paying the fees associated with a mortgage, or adding the cost of the home loan into your principal balance, a no-fee loan has a slightly higher interest rate. This is ideal for homeowners who are not certain they will be in their home long term, or for borrowers who are likely to Refinance their home again in the next 10-12 years. If the plan is to keep the home and the mortgage for at least 12 years, then I may suggest paying fees to achieve the lower rate. As part of our mortgage review process, we evaluate the options and determine which is most appropriate for our clients. A mortgage is a very personal decision. If your mortgage advisor does not fully understand your long term goals, he or she is not able to ensure the best loan strategy that will help you accomplish your plans.
What is the First Step?
My team offers a free mortgage analysis. The process begins with a fifteen minute phone call where we gather the information needed to prepare our recommendations. In many cases, we find people who are already in the bestmortgage strategy available. If that is the case, we will put you on our rate watch and will continually monitor your interest rate against the market and proactively contact you if an opportunity arises to improve your situation. Regardless, every homeowner who has a mortgage should take the time to have a free evaluation to ensure their loan is properly structured. Call 801.501.7950 or email me to arrange a time that we can discuss your review.