If you’re teetering on the brink of a refinance but you’ve
yet to move forward, it’s very likely it’s because you’re waiting for interest
rates to go down a bit more. After all, if it does make sense to refinance now
but rates might go down even further then you’ll save even more, right? But
let’s step back a bit from the interest rate question or even looking into the
future and dig a little deeper.
If your loan officer has suggested a refinance it’s because
rates have fallen compared to what you now have, changing loan terms saves long
term interest or you’re getting out of a hybrid or adjustable rate loan into
the stability of a fixed. That means should you decide today to go ahead and
tell your loan officer you’re ready to close the deal it will be a wise choice.
Yet many are out there trying to make it wiser by waiting. Here’s our advice-
Assume whatever you decide it will be the wrong decision. How’s that?
Let’s say that right now you would benefit from a refinance.
So you tell your loan officer to lock in your rate and draw your closing
papers. Then a few weeks later you notice rates have fallen. If only you had
waited you could have gotten the lower rate. It’s not much lower, but lower
Now let’s say that you would benefit from a refinance and
you decide to wait to see if rates go down. Don’t depend upon your loan officer
to tell you what to do in this situation, it’s really your decision to make.
Okay, so you decide not to lock in right now but rates start to creep up.
You’re checking on rates every day and your loan officer is giving you the bad
news. It’s still good to refinance just not as good as it was a couple of weeks
ago. You keep waiting, hoping rates will fall back to where they were. But they
don’t. In fact, now they’re so high it no longer makes sense to refinance. The
window has closed.
Okay, so which way would you rather be wrong? Locking your
rate now and getting a good deal or waiting and rates rise and never look back?
We thought so. No one knows where rates are headed. No one. You can only deal
with the facts in front of you. If you’ve got a refinance application approved
right now, you may think about locking in.