It was a rough week for mortgage rates. Rates are up about .25% for all loan products due to a jittery bond market. Ever Since the Fed announced Quantatative Easing 2 (QE2) last week mortgage bonds have gone lower; pushing up the yeilds (thus rates).
Many had heard or hoped that this round of QE2 would push rates even lower and held off on a refinance opportunity for those lower rates...turns out that was not a good decision. Most of the time my adivice to clients is that if they like the rate they are being offered they should lock it in and not worry about if things get better or worse after that moment.
Many think they can hold out for what they think will be a better rate...sometimes that gamble pays off...and sometimes it doesnt. Keep in perspective that getting a .125% better rate on a 300k loan is only $21.70 savings in their payment. $21.70 savings over 360 months (30 year loan) adds up to $7811.71. Do you really want to gamble with rates going up to save $7800 over a 30 year period?
I have been surprised with the long run of low rates. I dont expect rates to shoot through the roof quickly, but I do think that rates will go up from here and if you have an interest rate over 5.25% or are in an adjustable rate mortgage you really should jump on this opportunity to refinance to a low rate now...and not be the person trying to save $21.70/month who missed out on the opportunity altogether because rates never did go back down.
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