Is It Time to Refinance?
You may have heard that mortgages are once again attractive to refinance. Over the last three months, these rates have managed to achieve five all-time lows. Just the other day, Freddie Mac, which buys mortgages from banks, reported an average 3.03% rate on 30-year fixed-rate mortgages, and there is a chance that we could see rates below 3% without points between now and the end of August.
You can see the remarkable downward trend in mortgages from late 2018 through the end of June, and then the light-blue-shaded part of the chart shows projected rates going forward. Compare these rates to 18% fixed rates back in the early 1980s, or 5% as recently as 18 months ago. You can take the projections with a grain of salt (nobody knows what will happen next week or next month, much less out to the end of the year), but it’s pretty clear that today’s 3% rate is pretty extraordinary.
The decision to refinance is based on your goals. Are your goals better served focusing on current cash flow, time until you have paid off your mortgage, long term net worth or a combination? Lowering your rate doesn’t always move you towards your goals but when rates are much lower than your mortgage it is worth a review.
-Some of the material above was provided by Bob Veres Insider Forum, https://themortgagereports.com/32667/mortgage-rates-forecast-fha-va-usda-conventional, and https://fred.stlouisfed.org/series/MORTGAGE30US-