Mortgage rates are low. Take advantage of them while you can!

Mortgage rates have dipped to the lowest point in the past 2 years. Fueled by the fear of an upcoming recession (a result of the soft housing market, mortgage meltdown, etc.) mortgage rates have continued to fall lower than many people had anticipated.

Now is the best time to refinance your current mortgage to save money. Many of you have an adjustable rate mortgage that will be adjusting in the next year – refinance to a fixed rate mortgage before your rate, and payment, increase.

• You may have a first and a second mortgage – roll them into one mortgage for savings and convenience.


• You may have higher interest debt such as credit cards – pay them off and save a ton of money.


• Or, maybe you have a large expense coming up (college tuition, automobile purchase, vacation, Christmas) – cash out some of the equity in your home to pay for these expenses at the lowest possible rates.

Whatever your situation now is the time to take action.

But, John, what if rates go lower?

I get this question from customers all the time. The problem is, we never know for sure what is going to happen with interest rates. If we knew for sure, we would all be retired by now by investing perfectly and making a fortune.

The truth is, you can save money NOW - but you may NOT be able to save money next month, or even next year. During the refinance boom a couple years ago, I had customers that did not want to lock into a 30 year fixed rate mortgage at 5.00% because they thought rates would continue to fall. Well, they lost the opportunity to refinance and have paid all that extra money for the past couple of years.

And remember, if rates go lower, you can always refinance again.

Won’t that cost me more money?

Yes, and no. If you refinance, there will be some closing costs. If you refinance a second time, you will have to pay closing costs again, but they will be much lower. And, if you continue lowering your rates and payments, it can make perfect sense financially.

The real fear should be NOT refinancing now and rates NOT getting any lower. If rates remain the same as they are now, and you wait a couple of months to refinance, you have LOST the cost savings for those couple of months by paying at your current payment. If rates go up, you have lost even MORE money because now you will have to refinance to a higher rate or, worse, not be able to refinance at all.

Also, if you refinance before the end of the year, you may increase your deductions on your income taxes for the year, thereby reducing the amount of tax you owe the government, or increasing the amount of your tax refund (check with your tax professional to see what you can or cannot deduct from your taxes).

What if the value of my home has fallen?

There will be situations where the value of the home has fallen to a point where you cannot refinance your home. There is nothing you can do about that now. But, by contacting your loan officer, he or she can at least let you know what is possible. Your loan officer can ask the appraiser for an opinion on the value of your home to see if it is worthwhile to have the appraisal done. And, at least you know for sure what is happening, rather than just wondering.

Give your loan officer a call so he can do a mortgage checkup to see if refinancing is right for you. Or, give me a call at 708-473-3788 or send me an email – I would be happy to help you.

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