Refinance at 4.75% – Your 2009 Resolution?

Posted on | January 1, 2009 | 5 Comments

Over the last two weeks, MANY homeowners have locked in at 4.75% and zero points.  The 30 year fixed rate fell for the ninth straight week and it is the third straight week of all time record lows since data was initially collected in 1971.  Since the beginning of November, rates have fallen over 1.25% which equates to a savings of almost $175 a month on a $200,000 mortgage.  With this opportunity awaiting, is your new year’s resolution to refinance at 4.75%?

The overall trend of mortgage rates is definitely on a downward slope, but no one knows when there will be a quick bounce.  One thing is for sure, rates will get a bounce sometime in the near future as mortgage lenders will get flooded with too many mortgage applications and the only way to alleviate the amount of applications is to increase rates.  While this is highly likely to happen, it will not last a significant period of time.  Overall, the trend for 2009 will, most likely, be down, with a few bounces here and there to keep market psychology in balance.

With consumer prices decreased and the unemployment rate increasing, there are going to be some rare opportunities in the housing market.  Even if rates stabilize, there is still a need for supply and demand balance in the housing market.  Most markets have way too much housing inventory when compared to sales.  The only way for this to fix itself is for prices to drop until supply equals demand.  For the common American, that means lower prices in a time with low mortgage rates.  It almost sounds too good to be true! So, please keep an eye on the mortgage market and do not miss a chance to refinance at 4.75%.

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