I have maintained since the beginning of 2008 that this is the time to refinance or purchase a new home because the timing is perfect. Prices are down, rates are low(remember at the end of January when you could get 5.375% on a 30 year fixed with 0 points). I had several people who refused to lock because they were positive rates were going to drop below 5%, so they waited. The result for those people is that they ended up at 5.875%.
Now here we are near the end of July, and rates are at 6.5% with 0 discount points for a 30 year fixed.
These are still great rates!
Example:
180K 0 discount point mortgage
1137.72 Principal & Interest at 6.5%
1064.77 Principal & Interest at 5.875%
72.95 Difference
At 72.95 more, this adds a relatively small amount to your monthly debt ratio. If this difference is going to put the borrower in financial stress they need to be looking at a smaller mortgage.
With the current economic climate, mortgage interest rates are more likely to continue their upward trend.
So if you have been on the sidelines waiting for the perfect time to purchase that home:
DO IT NOW! Contact your Realtor!!
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