Good news: February home sales are UP! Bad news: sales levels were still as low as in 1963 (for January). Bottom line? Things are starting to pick up--sales are up, prices have creeped up, rates are still low... for now! With all the money printing going on in DC, the dreaded "I" word will HAVE to rear its' ugly head someday soon. Yep, INFLATION. So, if you are on the fence, BUY NOW. If you are waiting to refi because you're waiting on another 1/8 point drop, STOP IT--go ahead and LOCK and save the drama!
Take a 100,000 loan (for this exercise, I am computing interest ONLY). At 4.875, the monthly interest portion would be $406.25. At 4.75% it falls to $395.83 and 4.5% it drops further to $375. So riddle me this-is it worth waiting and waiting in hopes that it drops to 4.5% (which it may, to be honest) or get nailed when it goes back over 5% (that would = 416.66). Why not just lock today as you a) will have a guaranteed LOW rate (i.e. don't get too greedy) and b) you can still get a loan based on current lending standards (underwriting standards change so often it can make your head spin!). I guess that would be the 'bird in hand' theory for mortgage rates. Who knows, if rates truly do drop, maybe you can refi again! But if you're sitting there at 5.75% or higher, what the heck?
While we're at it, click HERE for an AWESOME house!
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