WAITING FOR A LOWER INTEREST RATE!
I am amazed each and every day to learn that someone I speak with is waiting for a lower interest rate before they refinance.
I just spoke with someone with an adjustable rate due to change in December. He wonders if the rates are going to get better.
Maybe because I am in the business, I don't know, but I have a hard time understanding the mentality of waiting for a lower interest rate these days.
I have one borrower who refi'ed about 2 years ago for a 5.375% fixed 30 year rate. At the time a very good rate. They were happy with it then and are still happy with it now. A few months after closing the rate went down about 3/4 point, and still, I've not heard them complain. All I can say is "Thank God for people like them!"
The only way to know when the interest rates have hit bottom is to have a crystal ball. Anyone?? Many times the waiter, waits himself right into a higher rate, lower values, or tighter lending standards.
If someone has a variable rate loan, now is the time to look seriously at refinancing to the fixed rate or a combination of fixed rate, shorter term. Will rates be lower tomorrow? Who knows? There is equally the chance they will be higher!
The biggest factor I see in day to day applications is not what the interest rate IS, but what stands in the way of getting the advertised rate. With most loans being based on credit scores and loan to value the borrower with the lower credit scores and higher LTV's are not getting the best rate! Like the CNN article says, rates may be 4%, but good luck getting it!
http://money.cnn.com/2011/10/19/real_estate/mortgage_rates/index.htm?iid=Lead
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